The Philippine Exporters Confederation, Inc. (Philexport) is calling for the immediate passage of a bill seen to improve the government’s current incentives and tax regime.
The local trade association of exporters, the latest major private sector organization to press for the measure, said it was supporting Senate Bill No. 2654 or the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill, which proponents believed would clarify uncertainties in the current CREATE Act.
Philexport president Sergio R. Ortiz-Luis, Jr. noted there were inconsistencies between CREATE and corresponding administrative issuances on taxes and incentives in freeport and economic zones.
“These issues have seriously and unfairly impacted the operations and competitiveness of existing companies and are inconsistent with the current efforts of the Marcos administration to attract investors,” Ortiz-Luis said in a statement late Friday.
He said among the inconsistencies was the distinction made between registered domestic enterprises and export enterprises inside separate customs territories when applying zero-rated value added tax (VAT) privileges.
“Under the CREATE Act, VAT zero-rating on local purchases is granted to registered business enterprises (RBEs) in general,” he said, but noted its implementing rules and regulations limited the application of the VAT exemption on importation and local purchases only to registered export enterprises.
Philexport said the distinction put domestic market enterprises inside separate customs territories at a disadvantage. They have even ceased to avail of the incentives, including the 5-percent tax on gross income earned that they were supposed to enjoy for 10 more years under the transitory provisions of the CREATE Act, the business group said.
The Philippine Chamber of Commerce and Industry (PCCI) also earlier called for the immediate passage of the bill.
“This situation not only disincentivizes local suppliers of manufacturers inside freeport zones. It also puts manufacturers, exporters at a disadvantage as they must now absorb the VAT passed on to them by their local suppliers,” PCCI president Eunina Mangio said in a previous statement. INQ