Bicam committee fixes kinks in Salceda’s CREATE
By Mar S. Arguelles
THE Senate and the House in a bicameral meeting have finally ironed out recently the differences on the proposed reform of corporate income tax and fiscal incentives or Package 2 of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) , Albay Rep. Joey Salceda said on Jan. 31.
Salceda, House Ways and Means committee chairperson, said the major items concurred were the shorter incentives for domestic enterprises, stringent controls against illicit trade in certain ecozones, and longer incentives for all areas outside of National Capital Region (NCR).
Another concession reached was that domestic enterprises will be able to avail of five years shorter special corporate income tax (SCIT) or enhanced deductions compared to the Senate version. Additionally, they have to have an investment capital of at least P500 million to qualify for the SCIT.
As for critical domestic industries, they will be able to avail of incentives similar to those of export enterprises.
The industries qualified as “critical” will be determined by the National Economic Development Authority (NEDA) as “arbiter between fiscal health and industrial development,” Salceda said.
“It’s done. Both panels are now ready to sign. The secretariats are now preparing the final copy , we will sign this weekend, and ratify by Monday or Tuesday (Feb. 1 or 2),” Salceda said.
Salceda said that some $ 18 billion in foreign direct investments (FDIs) were lost over the past three years of uncertainty over the delays in passing the reform.
“Now that it’s done, I expect the investment overhang to close. Investors can now stand on more solid footing,” Salceda said.
“As far as investment uncertainty over tax regime is concerned, that’s finished. The secretariats are now preparing the final copy as we speak.
Meanwhile, Salceda said that the House and Senate Bicameral committee has agreed to grant Value-Added Tax (VAT) and duty-free exemptions for Covid-19vaccines once the Package 2 of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) is passed.
Salceda said the VAT exemption and the duty-free exemption for the vaccines would be effective until 2025.
This, Salceda said, will help expedite COVID-19 procurement, especially by the private sector.
“Vaccine rollout is the most important economic stimulus measure. We are happy to report that CREATE/CITIRA will also help get it done,” Salceda said.