House, Senate approve corporate tax breaks. Inquirer Newsletter. February 4, 2021.

No images? Click here   ALIVE  Firefighters bring a dog out of the TP Marcelo Ice Plant and Cold Storage on North Bay Boulevard South in Navotas City, where an ammonia tank leaked, sending residents of the community fleeing their homes on Wednesday afternoon. Though bleeding and frothing at the mouth, the dog survived. But not Gilbert Tiangco, a worker at the ice plant who was overwhelmed by the gas as the tank ruptured around 4 p.m. He was declared dead on arrival at Navotas City Hospital, where some of the 61 people who needed medical attention were taken. Others were taken to Tondo Medical Center. Firefighters contained the leak at 6 p.m., and were still monitoring the air around the plant up to 100 meters as of 7 p.m. to see if it was already safe for people to return to their homes. Navotas City Mayor Toby Tiangco said the ice plant was shut down temporarily as investigators looked into its compliance with safety rules.  —Story by Nikka G. Valenzuela/photo by Lyn Rillon     News Child car seat law: Cost not only issue The child car seats required by law are seen as an added financial burden to middle class families during the pandemic. The prices of the child restraint systems vary according to a child’s height and weight. A 2017 study by the Institute of Health Policy and Development Studies at the University of the Philippines says the law “should be considerate of the socioeconomic situation in the country.”  —STORY BY MARIEJO S. RAMOS Read more: newsinfo.inquirer.net     Regions Pampanga wetland's important role cited CITY OF SAN FERNANDO—A sanctuary for migratory birds in Pampanga province has been cited as a “wetland of international importance”  for its role in supporting vulnerable and endangered species, or threatened ecological communities. The Sasmuan Pampanga Coastal Wetland’s recognition under the Ramsar Convention on Wetlands is expected to boost local conservation and ecotourism efforts. —STORY BY TONETTE OREJAS Read more: newsinfo.inquirer.net/World   Newsletter / Join us Has this been forwarded by a friend? Subscribe now to the Philippine Daily Inquirer Newsletter and get your latest news and important updates on COVID-19. Subscribe     Start listening   Banner Story House, Senate approve corporate tax breaks By DJ Yap, Nestor Corrales and Roy Stephen C. Canivel The Senate and the House of Representatives on Wednesday ratified a key economic reform bill that would give companies a “much needed tax break” by lowering the corporate income tax after the two chambers agreed on a consensus version. The Senate approved the final, uniform version of the proposed Corporate Recovery and Tax Incentives Reform Act, or CREATE, on Wednesday afternoon, a few hours after it was passed by the House. CREATE, formerly called Citira, or the Corporate Income Tax and Incentives Reform Act, will lower the corporate income tax immediately from 30 percent to 25 percent. Sen. Pia Cayetano, who led the Senate contingent during bicameral discussions on the bill, said she was happy over finally finding common ground with the House on the bill after it was sidelined for years. “I am elated, I am giddy with excitement to report to the Senate on the approved version of the CREATE Bill,” she said. Cayetano outlined the major provisions of the bill in the bicameral report: • Exemption of COVID-19 vaccines from import duties • Enterprises given the option to choose between the Special Corporate Income Tax of 5 percent or Enhanced Deductions after enjoying Income Tax Holiday • Higher incentives for enterprises located outside of metropolitan areas • Additional incentives for enterprises that fully relocate outside the National Capital Region • Additional incentives for those that will locate to areas that are recovering from disasters or armed conflict Some key provisions in the Senate version that were retained in the bicameral report were: • Immediate reduction of the corporate income tax to 20 percent for domestic corporations with total assets not exceeding P100 million (excluding land) and total net taxable income not exceeding P5 million; 25 percent for all other corporations • 1 percent minimum Corporate Income Tax effective July 1, 2020, until June 30, 2023 • 1 percent tax rate for Proprietary Educational Institutions and Hospitals which are nonprofit effective July 1, 2020, until June 30, 2023 • Value added tax (VAT) exemption threshold for socialized and low cost housing to P2.5 million and P4.2 million for house and lot • VAT exemption for medicines for cancer, mental illness, tuberculosis and kidney diseases beginning Jan. 1, 2021 • VAT free importation and sale of COVID-19 medicines and personal protective equipment from Jan. 1, 2021, to Dec. 31, 2023. “Instead of just a 1 percent drop in corporate income tax, we are giving an immediate 5 percent drop, reduction of our corporate income tax rate. It will now stand at 25 percent. And for MSMEs (micro, small and medium enterprises), it will be 20 percent depending on certain conditions as reported earlier,” Cayetano said. Closer to Asean average Sen. Sherwin Gatchalian described the CREATE bill as a “much-needed tax break” for many pandemic-hit companies that were still struggling with their finances. It could prevent “a wave of insolvencies that could affect the country’s economic growth in the long run,” he said. House tax panel chief Albay Rep. Joey Salceda said that with CREATE, “we are lowering corporate income tax to bring it closer to the Asean region’s average.” Asean is the 10-nation Association of Southeast Asia Nations that groups the Philippines, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam. Salceda said that with CREATE, he expected at least P12 trillion in domestic and foreign investment over the next decade, about $90 billion of that would be foreign direct investment. It would also create about 1.8 million jobs over the same period, and with economic amendments in the Constitution, there could be 8.4 million jobs, Salceda said. Speaker Lord Allan Velasco said that with the approval of CREATE and efforts to amend the Constitution, “we are confident that we can hasten our economic recovery, attract more local and foreign investors and create jobs for the Filipino people.” Insertions While CREATE is being lauded for the tax reforms that it promises to institute, an economic think tank said insertions were made in the bill that would tie the hands of the president and the future Fiscal Incentives Review Board (FIRB) from regulating corporate incentives granted by lawmakers. Under the CREATE bill, the FIRB, which is cochaired by finance and trade chiefs, can approve or disapprove tax incentives to projects above P1 billion. The president can modify these tax breaks to attract big ticket investments, letting them enjoy these privileges for up to four decades. But the tax and duty incentives granted through legislative franchises “shall be excepted” from the powers of the president to “review, withdraw, suspend, or cancel tax incentives and subsidies,” according to a copy of the consensus bill obtained by the Inquirer. Another provision will also exempt legislative franchises from having their tax breaks reviewed or cancelled by the FIRB. “This provision opens the floodgates for gaming by vested interests who want to receive incentives without being subject to rigorous scrutiny,” the independent think tank Action for Economic Reform (AER) said in a statement. “The governance of the FIRB keeps firms accountable and competitive, and removing the FIRB’s power to withdraw incentives from legislative franchises goes against the core principles of Create,” it said. Public benefit first According to an opinion piece by Tony La Viña, a professor of constitutional law, the primary objective of a legislative franchise is to benefit the public, while the rights and interests of the franchisee are second. A recent example of this is San Miguel Corp.’s airport project in Bulacan, which quickly secured a 50-year legislative franchise. Crude oil imports of local refineries would also be exempted from applicable duties and taxes, AER said. The exemption would be “discriminatory” and gives advantages to certain importers, AER said, adding that oil refineries were not a part of the Strategic Investment Priority Plan (SIPP), which defines what activities would qualify for incentives. The group also flagged the VAT exemption for low-cost and socialized housing, saying such exemptions were not “a focal point of CREATE.” “Poor households do not benefit from VAT exemptions on housing; these exemptions only benefit the rich while funneling funds away from development programs for the marginalized,” it said. The group called on President Duterte to exercise his line item veto power to strike out these “questionable” insertions. Read more: newsinfo.inquirer.net   Editorial Belated outrage Last month, Sen. Richard Gordon, chair of the Senate committee on justice and human rights, expressed outrage that at least 20 people, by his count, had been killed by motorcycle-riding assassins in January 2021 alone. "One killing is one too many. Alas, there are too many. They have no qualms shooting people in front of their family. They are not even afraid to shoot them in front of their children," said Gordon in his Jan. 18 privilege speech that led to the probe that kicked off on Jan. 28. These criminals who kill with impunity are "engendering hopelessness and fear in the people," Gordon added. Who will argue with that sentiment? Local and international rights groups have been raising the same hue and cry all this time, protesting the seeming inutility, or unwillingness, of the administration to seriously address the environment of violence that bloody police operations and unabated vigilante killings have inflicted on the land. In January 2017, Amnesty International released a report that said the killings arising from the government’s campaign against illegal drugs appeared to be "systematic, planned and organized" by police authorities, and could reach the standard of crimes against humanity. It was a damning, disturbing conclusion, but who was it who quickly dismissed the report as mere hearsay? Gordon, that’s who. Gordon now condemns the "brazen killings" and the "peril they bring to the country’s peace and order." The awakening is welcome, of course—but would that the outrage had come when it could’ve mattered, when it wasn’t yet too little and too late. Read full story: opinion.inquirer.net   Copyright © 2020 PHILIPPINE DAILY INQUIRER, All rights reserved. Our mailing address is: P.O. Box 2353, Makati Central Post Office, 1263 Makati City, Philippines.   Share    Tweet    Share    Forward  Preferences  |  Unsubscribe