The chairman of the House Committee on Ways and Means on Thursday urged the Senate to now approve the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, saying the lower chamber is always ready to adopt the Senate version of the proposal, if only to fast-track its approval.
Albay Rep. Joey Sarte Salceda reiterated that CREATE is one of the “legislative imperatives” that economic managers identified for the country’s economic recovery amid the pandemic.
He stressed that the House is ready to accept a fiscally sustainable Senate version.
The Senate is currently deliberating its own version of CREATE, and many amendments to the bill are causing prolonged discussions.
The first plank of CREATE—immediately cutting by 5 percent the corporate income tax (CIT) of 30 percent—has universal support. The proposal further offers more flexible incentives, with an immediate 5-percent income tax slash, after which the CIT will be reduced by 1 percent every year from 2023 to 2027 until it reaches the 20-percent mark.
However, the bill’s second major plank, the rationalization of tax incentives, has drawn a lot of controversy, with business groups saying it’s untimely to deprive investors and economic zone locators of incentives while the economy gouged by the pandemic quarantines is struggling to survive.
On Thursday, Salceda sought to push the pace of Senate approval faster. He said, “We will adopt it immediately if it suits our country’s fiscal position. If the Senate version, however, contains provisions that are inimical to the country’s fiscal standing, and will merely exacerbate inequities and manipulations in the tax system, I am constrained to reject it.”
Special session?
“I have the explicit and recently renewed direction of the House leadership and the President to fight for a fiscally sustainable version in the bicameral conference. The break should not be a concern. I am prepared to ask the President for a special session, as we have successfully done so in the past, with Bayanihan One,” he added.
According to Salceda, the two-year loss in foreign direct investment due to delays in passing CREATE was between $6 billion and $12 billion.
“This is a once-in-a-lifetime reform that will help solve a once-in-a-lifetime crisis. Let us not waste this precious opportunity on winding arguments. The time for action is today,” he said.
“We have delayed long enough. There are no new arguments. There are even no new facts. There are only conjectures, many echoing the same unfounded and unproven statements by the same vested interests that have benefited from our abuse-prone tax system for very long,” Salceda added.
He noted that the Duterte Cabinet approved CREATE in 2018.
“Every reasonable economist argues that if we ended uncertainty earlier, we could have inoculated the Philippine industry from some of the worst impacts of the Covid-19 pandemic. The country could now be among the most preferred investment destinations in the region,” he said.
“President Duterte has already asked Congress for this reform for four straight SONAs in a row. Should we make him ask again, when he clearly has the overwhelming support of the people to push for meaningful reforms?” Salceda asked.
Source: https://businessmirror.com.ph/2020/10/16/salceda-to-senate-create-cant-wait/