“This is something that concerns us as it would affect Clark’s desirability as destination for foreign direct investments (FDI),” said Irineo Alvaro, chairman of the Clark Investors and Locators Association (CILA).
CILA president Francisco Villanueva said in the Balitaan forum of the Capampangans in Media, Inc. here that changing the GIE policy would discourage investors and it would imply lack of security in their investments.
Alvaro and Villanueva urged the government to consult with them, as well as other economic zone investors in the country in finalizing the remaining four packages of TRAIN.
The Department of Finance (DOF) is pushing for the swift passage of the TRAIN’s Package 1-B to ensure the government’s fiscal position remains stable and its deficit target attainable.
Earlier, Finance Secretary Carlos Dominguez III said the P89.9 billion in projected revenue for this year from Package 1A of TRAIN corresponds to only about two-thirds of the P134-billion original revenue target intended under the measure, as reflected in the 2018 national budget.
He said the low revenue gain from the tax reform law could widen the country’s fiscal deficit in 2018 to 3.3 percent of the gross domestic product (GDP) unless Congress approves additional revenue-generating measures.
“Package 1B is crucial to keep the three percent of GDP deficit target,” Dominguez said.
DOF has estimated that Package 1B is seen to increase the government’s revenues by P38.9 billion, resulting in incremental revenues of P128.8 billion when combined with Package 1A.
Package 1A, signed into law last Dec. 19, involves the reduction of personal income taxes, adjustments in the excise tax of fuel, automobiles and imported coal and expansion of the value-added tax base, among others.
Package 1-B is expected to be tackled by Congress in the first quarter of this year. “We will need to pass packages 2 to 5. No succeeding packages means either a bridge of this deficit which will hurt our economy or a cut in government spending, possibly compromising the President’s infrastructure program,” Dominguez said.
He warned that “If Congress does not pass sufficient tax reform, either the deficit will be breached or spending needs to be cut.”
