THE PHILIPPINE Chamber of Commerce and Industry (PCCI) called for the immediate passage of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill, saying it will correct inconsistencies in the current law.
In a statement, the PCCI said the CREATE Act currently in force makes no distinction between an export enterprise and a domestic market enterprise in the context of separate customs territories.
“This situation disincentivizes local suppliers of manufacturers inside freeport zones,” PCCI President Enunina V. Mangio said in the statement.
She added that the law puts manufacturers/exporters at a disadvantage because they absorb the value-added tax passed on them by their local suppliers.
“Which they pass on to the consumers making them uncompetitive in the global market,” she said.
The PCCI said domestic enterprises have stopped availing of their incentives, including the 5% tax on gross income earned.
The CREATE MORE bill, which seeks to cut the corporate income tax to 20% from 25%, was approved by the House of Representatives on final reading in March and has been passed to the Senate.
The PCCI also declared support for CREATE MORE’s goal of streamlining the tax refund process.
“(Value-added tax) refunds represent sums of money owed by the government to zero-rated taxpayers and investors, who had already paid the VAT upfront on their purchases or investment. This is taxpayers’ money trapped with the government, idle, instead of being used to generate economic activity,” PCCI director for Taxation and Investment Policy Benedicta Du-Baladad said.
She added that inefficiencies in the refund system have raised the cost of doing business.
“Amid the aggressiveness of the current administration to draw in foreign direct investment and strengthen the economy, we must be able to improve our absorptive capacity by easing and making the cost of doing business more competitive,” Ms. Mangio said.
The PCCI also recommended providing Registered Business Enterprises in good standing with their respective Investment Promotion Agency an extension of indirect tax incentives which include duty exemption on imports, VAT exemption on imports, and VAT zero rating on local purchases. — Adrian H. Halili
