SUPPORTIVE. Senate President Juan Miguel Zubiri expresses his support for the establishment of the Bulacan Special Economic Zone, which he said would spur economic growth and infrastructure development in the area. Zubiri attended on Wednesday (Jan. 31, 2024) the public hearing conducted by the Committee on Economic Affairs on the Bulacan Airport City Special Economic Zone and Freeport Act. (Photo courtesy of Senate PRIB)
MANILA – Senate President Juan Miguel Zubiri acknowledged on Wednesday that some provisions of the Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which was approved and passed by the Senate in the last Congress, caused the country problems in earning more investments.
Zubiri made the admission during a public hearing of the Economic Affairs panel regarding the proposed establishment of Bulacan Airport City Special Economic Zone and Freeport Authority (BACSEZFA).
"It takes being a man to admit that as a majority floor leader, we made some mistakes at some of our measures. That's why the beauty of legislation is we can amend the measures to answer and address the concerns by the CREATE measure," he said in his opening statement.
One of these mistakes, Zubiri cited, is the powers vested in Fiscal Incentives Review Board (FIRB).
"It created so much confusion that a lot of our locators either left or those who have potential business proposals to the country were sitting in the sidelines kasi nga (because) we created this animal called the FIRB," he said.
Zubiri pointed at the FIRB as the reason why there are still hundreds of pending applications for ecozones.
The FIRB under CREATE, ensures that apart from tax subsidies, tax incentives are also granted and monitored properly by relevant agencies.
It also creates policies and acts as an oversight on the administration, approval or disapproval of granting tax incentives or tax subsidies.
Before CREATE Act, investors could go to economic zones and were welcomed with "fantastic packages."
"Everything was handled there. You only talk to one person, they come in and everything was perfect," Zubiri recalled.
"Now, they all have to go to FIRB, It think if its an investment over PHP1 billion. Eh, ano ba naman ang PHP1 billion? Yung planta nga lang ilang bilyon na (What is PHP1 billion? Building a plant costs billions) and I've met with several businessmen from different foreign organizations, from Japan, Korea, United States and that's their number one complaint," he added.
Zubiri noted, however, that the Senate Committee on Ways and Means is already on it to discuss the proposed amendments in making CREATE to Maximize Opportunities for Reinvigorating the Economy or the CREATE MORE bill.
The bill pushes reforms that cover the establishment of a streamlined tax refund system for registered business enterprises and institutionalization of risk-based classification of claims and audit framework to improve the timeliness, efficiency, and predictability of the VAT (value-added tax) refund process.
To improve the country’s presence and market share in the foreign market, the CREATE MORE bill also expands the enhanced deduction regime which shall increase the deduction for power expenses from 150 percent to 200 percent, and 200 percent deduction on expenses relating to approved trade fairs, exhibitions, and missions.
Moreover, the bill proposes to clarify the transitory provision by expressly exempting transitory RBEs under the 5 percent gross income earned regime from all national and local taxes, including VAT and duty incentives. (PNA)
