Rep. Albert Garcia (2nd District, Bataan), Chairman of the House Committee on Trade and Industry, said the enactment of an Investments and Incentives Code has also been identified as a legislative priority in the 15th Congress and as such will finally bring about the much-needed reforms that will improve the investment climate and generate more employment.
"While a number of investment-enhancing measures are in place, a more effective policy framework that would provide a stable and predictable investment regime for the country, underpins the urgent enactment of the proposed Investments and Incentives Code of the Philippines," Garcia said.
Three similar proposals are pending in the House Committee on Ways and Means chaired by Rep. Hermilando Mandanas. These are House Bill 4152 filed by Speaker Feliciano Belmonte and HB 3162 by Rep. Gloria Macapagal-Arroyo (2nd District, Pampanga) both seeking to rationalize the grant and administration of fiscal and non-fiscal incentives, and HB 938 by Rep. Susan Yap (2nd District, Tarlac) proposing the Investments and Incentives Code of the Philippines.
Garcia stressed the Philippines, while touted as one of the resilient nations in the face of the global economic downturn, has unfortunately lagged behind its ASEAN neighbors in terms of attracting foreign direct investment (FDI).
"In the context of an increasingly integrated global marketplace, increasing competition to attract investments, governments, particularly of developing and emerging economies worldwide, are focusing considerable attention and resources to generally and enhance their respective countries’ investment environment," said Garcia.
The increasing global competition requires an enhanced policy framework for investment, including a strengthened institutional system, and implementation of more effective investment promotion strategies to vigorously market their countries, according to Garcia.
Garcia further explained the rationalization of incentives is necessary in order to streamline regulation, which is considered as a requisite in attracting investments, among other things.
Garcia said his House Bill 4402 or the proposed Act Creating the Investments and Incentives Code of the Philippine will promote exports equally, whether they are located inside or outside the economic zones, because of the positive benefits they bring into the country in terms of foreign exchange earnings, job generation and technology transfers.
It shall also promote countryside development and job generation by granting Income Tax Holiday incentives depending on whether the investment is located in 1st class to 6th class municipality, or 5% tax on Gross Income Earned.
The bill also proposes flexibility to accommodate domestic "strategic" projects with the grant of an Income Tax Holiday and a reduced income tax regime of 50 percent from corporate income tax, under certain conditions.
It also introduces institutional reforms by clarifying the mandates and roles, enhancing the capabilities of key government agencies, and strengthening the monitoring and reporting process in the implementation of incentives for better fiscal policymaking.
It shall also eliminate competition among ecozone administrators on account of unequal tax incentive regimes by harmonizing the tax incentives found under existing investments and incentives laws.
source: www.congress.gov.ph
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