THE country’s largest business network has called on the government to extend long-term fiscal and nonfiscal incentives to investors as finance bureaucrats and lawmakers are pushing to rationalize tax perks.
The Philippine Chamber of Commerce and Industry (PCCI) on Thursday asked the government to provide incentives to private firms to revive their activity that got disrupted by the Covid-19 pandemic. Granting them incentives will boost their chances of recovering losses and retaining their workers, the group argued.
The PCCI appealed with the Department of Labor and Employment to sustain its wage subsidy program for as long as employers need assistance in paying their employees.
It also pleaded with the Bangko Sentral ng Pilipinas (BSP) and financial institutions to suspend loan amortization without penalties. Either this, or they can restructure loans without additional interest and postpone mortgage foreclosures for defaulting
borrowers, it added.
Likewise, the PCCI petitioned the BSP and state and private banks to extend for more than six months the amortization of outstanding loans availed of by micro, small and medium enterprises (MSMEs) to give them time to survive the pandemic and recoup losses after.
The PCCI also sought to lower assessment fees and lighten the conditions in getting business permits. It also demanded that state agencies, including local government units, refrain from imposing new requirements both to corporations and individuals until the economy resets to its performance prior the health crisis.
The push to incentivize private sector activity clashes with the government’s plan to reduce the number of privileges awarded to investors.
Under the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill, corporate income tax (CIT) will be brought down to 25 percent, from 30 percent. In exchange, incentives granted to firms operating in economic zones will be rationalized.
As part of the rationalization, locators will no longer be permitted to pay 5-percent tax on gross income earned in lieu of local and national taxes, as they will be required by the CREATE bill to relinquish the incentive and shift to paying 25-percent CIT.
In a statement on Monday, local and foreign investors asked President Duterte and legislators to consider the impact of the pandemic on business operations before approving the CREATE bill. They argued that the cost of doing business will increase if the measure is passed into law, at a time when they have to trim expenses due to the health crisis.
Apart from the grant of long-term tax perks, the PCCI asked the government to hasten the shift of procedures to digital methods, as well as incentivize firms who automate operations and reskill workers.
The PCCI pleaded with the Department of Agriculture (DA) to strengthen technical and funding support to farmers in the countryside. It said agriculture production should be improved for the country to maintain food supply for all seasons, especially in trying times.
The DA was also asked to allocate at least 40 percent of Agri-Agra credit facilities for start-ups and MSMEs whose ventures multiply the income of fishermen.
The policy recommendations made by the PCCI were packaged in its resolutions for this year’s Philippine Business Conference and Expo. Every year, the group files to the government a list of proposals geared toward enhancing the country’s investment environment.
The 46th Philippine Business Conference and Expo, themed [email protected], hosted some of the country’s state leaders, including the President and Vice President, and private sector figures in a series of sessions on how firms can weather the Covid-19 storm.