MANILA, Philippines — Senator Richard Gordon on Thursday turned emotional as he objected to the inclusion of Subic Bay Metropolitan Authority and the country’s other freeport zones under the proposed Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
During the Senate’s plenary session, Gordon aired exasperation over the authority of the Fiscal Incentives Review Board (FIRB) in approving tax incentives under the bill.
“I have tears in my eyes! So, I beg you. Let us watch every step we make,” he told his colleagues, noting that most freeport zones in the country survived with little support from the national government.
“Masyado ang panghihimasok naman noon na wala nang kadiskarte-diskarte ang local officials,” Gordon said.
The FIRB is an existing interagency committee, chaired by the Department of Finance, which currently grants tax subsidies to government-owned or -controlled corporations.
Under the CREATE bill, the FIRB would be empowered to approve investors’ tax perks for investments beyond P1 billion.
“Yung FIRB, merong threshold na P1 billion. Sisiw ho ‘yan, ako nakakakuha ng investment $100 million,” Gordon went on.
“Ibig sabihin maghihintay pa ako, tatakbo pa ako sa FIRB para mapasa yang investment. Yan ang mahirap diyan e, that’s another layer of bureaucracy,” he added.
Gordon proposed to exempt Subic Bay Metropolitan Authority and other freeport zones from the coverage of CREATE.
But Senator Pia Cayetano, sponsor of the bill, rejected Gordon’s proposed amendment.
“The whole essence of CREATE is to be able to have all the IPAs (investment promotion agencies) accountable and to make their filings and submission to the FIRB so that the FIRB can ensure that these IPAs are being accountable,” she said.
Gordon made an appeal which prompted a nominal voting among the senators on the proposed amendment.
The proposed amendment did not prosper with only five senators voting in favor of Gordon’s proposal while 14 voted in the “no.”
The Senate later on approved the bill on third and final reading. Gordon was the only one to vote against the measure. The bill will then be discussed in the congressional bicameral conference committee, after which it will be submitted to the President for signature.
The CREATE bill seeks an outright five-percent cut in the country’s corporate income tax rate.
Once enacted to law, corporate income taxes will be lowered from 30 percent to 25 percent until the rate is down to 20 percent in 2027.
The measure also seeks to rationalize fiscal incentives by making them time-bound and performance-based.