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MANILA, Philippines – On Thursday, Senator Richard Gordon was excited to object to the inclusion of the Subic Bay Metropolitan Authority and the country’s other freeport zones under the proposed Corporate Recovery and Tax Incentives Act for Businesses (CREATE).
During the Senate plenary session, Gordon expressed his exasperation at the authority of the Tax Incentive Review Board (FIRB) to pass tax incentives under the bill.
“I have tears in my eyes! So I beg of you. Let’s watch every step we take,” he told his colleagues, noting that most of the country’s free port zones survived with little support from the national government.
“It was too much interference then that local officials no longer have a strategy,” Gordon said.
The FIRB is an existing interagency committee, chaired by the Department of Finance, that currently provides tax subsidies to government-owned or controlled corporations.
Under the CREATE bill, the FIRB would be empowered to approve tax benefits for investors for investments in excess of P1 billion.
“FIRB, it has a threshold of P1 billion. That girl, I get a $ 100 million investment, ”Gordon continued.
“It means that I will have to wait, I will run to FIRB to approve the investment. That is the difficulty there, that is another layer of bureaucracy, “he added.
Gordon proposed exempting the Subic Bay Metropolitan Authority and other free port zones from CREATE coverage.
But Senator Pia Cayetano, a sponsor of the bill, rejected Gordon’s proposed amendment.
“The essence of CREATE is to be able to hold all IPAs (investment promotion agencies) accountable and make their presentations and submission to the FIRB so that the FIRB can ensure that these IPAs are held accountable,” he said.
Gordon made an appeal that prompted a roll call vote among senators on the proposed amendment.
The proposed amendment did not go through with only five senators voting for Gordon’s proposal, while 14 voted “no.”
Subsequently, the Senate approved the bill in the third and final reading. Gordon was the only one who voted against the measure. The bill will then be discussed in the congressional bicameral conference committee, after which it will be presented to the President for signature.
The CREATE bill seeks an absolute five percent reduction in the country’s corporate income tax rate.
Once enacted into law, corporate income taxes will be lowered from 30 percent to 25 percent until the rate drops to 20 percent in 2027.
The measure also seeks to streamline tax incentives by making them time-bound and performance-based.
EDV
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