Exporters want CREATE law amended

A group of manufacturers in electronics, the country’s top exporting sector, hopes the next administration would give the Philippine Economic Zone Authority (Peza) more room to attract foreign investments, a move that will eventually require revisiting President Duterte’s corporate tax reform law barely more than a year after it got passed.

Danilo Lachica, president of the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (Seipi), is hoping the next administration will revisit the CREATE Law, or the Corporate Recovery and Tax Incentives for Enterprises Act, a measure that was enacted on March after nearly three years of painstaking deliberations.

“I just hope the next administration can revisit that, especially the ability to attract investments in the same scale as our Asean neighbors because they are our competitors. If ever, and this is going out on a limb, I would like to request the next administration to revisit the ability of Peza to attract and approve investments,” he said.

He said this during a panel discussion in yesterday’s Arangkada Forum, an annual event hosted by foreign business groups in the Philippines. The CREATE Law, which lowered the corporate income tax while rationalizing tax incentives, would already be a little over a year old once the new presidential administration starts in 2022.

The CREATE Law had set a threshold for investments that can be approved by investment promotion agencies like Peza. They can approve a project if it is below P1 billion. But if the value exceeds the amount, the project would have to be approved by the Fiscal Incentives Review Board, which is headed by the Department of Finance.

When asked on Tuesday if Seipi would want the threshold raised to a certain level, he said in a Viber message: “That’s a good first step, but beyond just setting a limit, I think we really need to study why our neighbors are getting more foreign direct invesments and once we understand the root causes, act accordingly.”

In a press briefing also on Tuesday, top officials of other business groups also said they were for giving Peza more room to attract investments, citing its track record. INQ