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By Sammy Martin Reporter
Aware that the exports sector
needs a boost, the chairman of the House Committee on Ways and Means
has assured passage of the Consolidated Investments Incentives Code
of the Philippines before Congress winds up its first regular
session on June 13.
Antique Rep. Exequiel Javier said
he is optimistic that the measure, which he authored, will pass on
third and final reading before Congress adjourns sine die.
The proposal is pending in the
committee.
Javier’s House Bill 2278 seeks
to give exporters eight more years of a 100-percent income tax
holiday from the time the act becomes effective.
He said he put a time limit
because the aim of the bill is to level the playing field for
Filipino exporters struggling against international competitors.
Support measures should always be
time-bound lest the sector that stands to benefit from them becomes
soft and complacent by depending forever on the tax holiday.
The Senate, though, will to have
to agree with the House on the consolidated version of the bill.
Javier explained that the tax
incentives for exporters under the Board of Investment at present
vary from those granted under the Philippine Economic Zone Authority
(PEZA).
“PEZA incentives are different
from the Aurora Ecozone incentives. Subic Freeport incentives and
Cagayan Freeport incentives also differ from each other,” he said.
His bill aims to make the
incentives uniform.
Javier said there is glaring need
to consolidate and harmonize these laws to level the playing field
and eliminate incentives as a basis for competition among Philippine
investment promotion agencies (IPAs).
“This [consolidation] will also
prevent investors from cherry-picking and doing dual
registration,” he added. “Because some companies have dual
registration, the amount of foreign direct investments in the
country could be overblown because investment of these companies are
reported by two IPAs.”
Javier said that he believes the
bill will uplift exporters equally, whether they are located inside
or outside economic zones. He added that the exporters must get the
same support from the government because they all make positive
contributions to the economy through their foreign-exchange
earnings, the jobs they generate, and the high technology they bring
in from abroad.
The bill “will eliminate
competition among ecozone administrators on account of unequal tax
incentives regimes,” he said.
Existing redundant tax incentives
found in all the various investment incentive laws will be
eliminated. The new law will replace these redundancies with either
a reduced income tax package or a gross income tax package, Javier
added.
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