BALANGA CITY, Bataan – Rep. Albert S. Garcia on Thursday announced that he has sought the urgent passage of the Investment and Incentives Code of the Philippines to rationalize all incentives and investment laws of the country.
“This is in order to achieve a more effective policy framework that would promote consistency, transparency and predictability in the country’s investment regime,” the congressman of Bataan’s Second District said.
Garcia also said he made the appeal during the recent joint committee hearing of the House Committee on Trade and Industry that he chairs and the Committee on Ways and Means attended by members, authors of the bill and stakeholders.
He added that while a number of investment-enhancing measures are in place in the Philippines, there is a need for a more effective policy framework that would provide a stable and predictable investment regime for the country that could be attained with the urgent enactment of the proposed legislative measure.
The congressman said that governments, particularly developing and emerging economies worldwide, have focused considerable attention and resources to enhance their investment environment.
“This has called for an enhanced policy framework for investment, including a strengthened institutional system, and implementation of more effective investment promotion strategies to vigorously market their countries,” Garcia said.
He revealed that several attempts to pass this piece of legislation have been made for more than 10 years already.
Several versions both in the House and in the Senate were filed in the attempt to address the seeming lack of investments and incentives policy coordination and promotion between and among government agencies.
“This has resulted in disintegrated and inefficient implementation to the discouragement of would-be-investors,” the Bataan lawmaker said.
Under the Code that Garcia has sought immediate passage, the government shall adopt policies that will enhance the competitiveness of the Philippines as an investment site. At the same time, it will ensure that the incentives are cost efficient.
Among the specific provisions of the legislation are: the bill will promote exports equally, whether they are located inside or outside the economic zones, because of the positive benefits they bring into the country in terms of foreign exchange earnings, job generation and technology transfers.
It will promote countryside development and job generation by granting Income Tax Holiday or 5% tax on Gross Income Earned incentives depending on whether the investment is located in 1st to 6th class municipalities.
The bill will have the flexibility, under certain conditions, to accommodate domestic “strategic” projects with the grant of Income Tax Holiday and a reduced corporate income tax.
It will introduce institutional reforms by clarifying the mandates and roles, and enhancing the capabilities of key government agencies, and by strengthening the monitoring and reporting processes in the implementation of tax incentives for better fiscal policymaking.
It will eliminate competition among ecozone administrators on account of unequal tax incentive regimes by harmonizing the tax incentives found under existing investment incentive laws.
Garcia asserted that the rationalization of incentives is necessary in order to streamline regulation which is considered as a requisite in attracting investments, among other things.
He said that the bill was identified as a legislative priority in the 15th Congress as it will finally bring about the much-needed reform that will improve the investment climate to attract more investments and generate more employment.
