Connect with us

Hi, what are you looking for?

Economy

Higher FIRB approval threshold seen weakening CREATE reforms

A CAMPAIGN to raise the investment threshold beyond P1 billion before a project can go before the Fiscal Incentives Review Board (FIRB) would weaken tax reform by removing many investments from scrutiny, according to Action for Economic Reforms (AER), a policy think tank.

In a statement Tuesday, AER said the request of the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) to increase the threshold for projects going before the FIRB in the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill is a “self-serving, shallow argument that will render the FIRB toothless.”

“Even if the bicameral conference committee convenes to reconcile the House and Senate versions of the bill, legally, it cannot insert the amendment that some industry leaders are asking for as the amendment cannot be found in either the House bill or the Senate bill,” it added.

The Senate approved Senate Bill No. 1357, its version of CREATE, on third and final reading last week. It proposes to cut the corporate income tax to 25% from 30% currently, with further reductions of one percentage point each year starting 2023 until it falls to 20% by 2027.

The measure also seeks to strengthen the capacity of the FIRB, chaired by the Secretary of Finance, to oversee the grant of incentives by investment promotion agencies (IPAs) and other bodies. The bill as it currently stands delegates investment approval for projects under P1 billion to the IPAs; projects beyond that threshold are to go before the FIRB.

SEIPI President Danilo C. Lachica has called the threshold too low and warned of approval delays and investor withdrawals if the FIRB approves projects at the P1 billion level.

“If you think about it, that P1 billion is like $20 million and that’s way below the expansion, and even the reinvestment cost for multinationals. For one, it clips the authority of the PEZA (Philippine Economic Zone Authority). It will (also) be a disincentive for investors because of the potential red tape,” Mr. Lachica told the Arangkada online forum Tuesday.

SEIPI is targeting an increase in the threshold to at least $1 billion (P48 billion), he said.

“While (existing rules state) that if not approved for 45 days it is considered approved, (the period is) very very long. It’s too low, and it may create bottlenecks and bureaucracy in the process,” he added.

The AER, leaving the authority to approve investments to various independent IPAs could lead to “incoherence, inconsistency, and weakening accountability” and the uncertainty surrounding the decision-making may discourage investors.

“It is but proper that more diligence be put in place for bigger amounts of investments,” said AER Coordinator Filomeno S. Sta. Ana III in the statement. — Beatrice M. Laforga

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

THE PESO strengthened against the dollar on Tuesday amid easing global oil prices and ahead of an expected increase in remittances due to the...

Economy

PHILIPPINE STOCKS extended their climb on Tuesday on last-minute bargain-hunting and ahead of the rebalancing of the MSCI. The bellwether Philippine Stock Exchange index...

Economy

THE government financial institutions (GFIs) that will be tapped to provide capital and help manage a P250-billion sovereign wealth fund have disclosed their proposed...

Economy

THE European Chamber of Commerce of the Philippines (ECCP) urged the Philippines to eliminate tariffs on imports of all electric vehicles (EVs) regardless of...

Economy

PRESIDENT Ferdinand R. Marcos, Jr. is expected to sign an executive order (EO) that will fast-track applications for investments deemed strategic to the economy,...

Economy

AN Israeli tech investor said a country’s legal system is a major consideration in attracting foreign investment, and urged legislators to reform the tax...

You May Also Like

Investing

The minute that any question pops into your head, you can simply ask Google. No longer do we have to pour over books and...

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Investing

Browsing history makes referring to sites and pages you’ve visited in the past seamless. It’ll help you recall what page you checked out on...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.