House Speaker Gloria Macapagal Arroyo has stressed the need to prioritize infrastructure development and the ease of doing business, saying these are crucial factors to investors, as seen in the industrial town in San Simon, Pampanga.
Arroyo made the statement following a dialogue with locators at the Freeport Area of Bataan at Bataan Freeport Zone Friday, even as she pushed for measures which promote rationalization of tax incentives.
“I asked the investors, why did you come here? None of them is getting fiscal incentives. They came here because of the infrastructure,” Arroyo said.
Allaying fears that the proposed tax reform law might scare away investors, Arroyo said infrastructure and the ease of doing business were the most important factors for business ventures.
While incentives may attract investors, they cater only to so-called footloose businesses and that infrastructure and ease of doing business are the factors that attract investors to a particular country, Arroyo said.
During the forum, concerns were raised that the proposed Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) bill may turn off investors as it takes some of the incentives given to existing enterprises especially those operating in free ports and economic zones.
Contained in House Bill 8083, the TRABAHO bill is the second package of the Duterte administration’s tax reform package.
Arroyo mentioned that during the FAB dialogue that locators were pleased to know that they were not losing their export-related incentives as the government recognized that some locators are footloose, thus need to keep these incentives.
However, for most business enterprises, there is a need to implement more efficient and reasonable policies to enable the government to raise more funds for better services and infrastructure to enable people to grow and businesses to flourish in the country.
In the first place, she pointed out, most businesses do not come to the country for the incentives but for the infrastructure and ease of doing business just like what is happening in San Simon in Pampanga.
She pointed out that investors in San Simon industrial park did not place their businesses for the fiscal incentives but because of the good infrastructure and the support of the local government.
“The government realizes that there are businesses that need fiscal incentives and there are industries that invest not really because of incentives but because of infrastructure and the ease of doing business,” Arroyo said.
About 15 of the biggest FAB locators along with Bataan Gov. Albert Raymond Garcia, Mariveles Mayor Ace Jello Concepcion and Authority of the Freeport of Bataan Chairman and Administrator Engeneer Emmanuel Pineda attended the meeting with Arroyo and her group: Reps. Dakila Carlo Cua of Quirino and Jose Enrique Garcia III of Bataan.
Cua, who chaired the House ways and committee when TRABAHO bill was approved at the committee level, said no less than Arroyo showed that Congress was listening to the locators.
“We are trying to relay the message also, together with the DoF, so that we can strike a good balance in crafting a policy that would bring more jobs to our people,” said Cua.
Cua said although the bill had reached the plenary, there were still opportunities for the measure’s improvement, the most obvious of which is the period of amendments.
There is also the Senate where the whole process for discussion and improvement of the bill is still open.
Then the third opportunity is the bicameral committee.
During the dialogue, among the issues discussed was “the granting of tax incentives that are performance-based, transparent and time-bound.”
Cua said the government targeted industries which needed incentives and had been creating jobs.
Cua said the FAB locators themselves acknowledged that the top reason for investing in the country was its talented workforce.
“The best incentive in investing in the country is not in the bill, but it’s the people, according to the locators,” he said.
Meanwhile, Garcia said the businessmen were happy that Arroyo and her group went there to discuss HB 8083 with them.
“We took this opportunity to clarify some of the provisions of the bill. We also took this opportunity to let them know what aspects of their business will be affected,” said Garcia.
Garcia said some of the issues discussed with the locators were the rate and length of incentives, the VAT and how it would be refunded, among others.
He said they clarified to the locators the meaning of time-bound.
Garcia said the proposed amendments to the bill could be done in the plenary and the committee.
He said he would propose for the House to keep the autonomy of the FAB because of its good performance.
“There should be a performance-based implementation of the bill. Meaning, if the FAB is bringing in investments, bringing in jobs, getting locators, and paying well the taxes, then let it still be autonomous as it is now. It has its own charter. I think that is the reason why the FAB is successful,” said Garcia.
For his part, Finance Undersecretary Karl Kendrick Chua, also present during the forum, said the Department of Finance would keep an open mind to the proposals raised.