Tax incentives should remain relevant to attract and influence the decisions of investors, especially if all the basic infrastructures and investment climate are relatively similar to each other, Trade Undersecretary and Board of Investments managing head Ceferino Rodolfo said Thursday.
“Not all incentives are wasted, not all incentives are bad. Incentives are able to attract investments into the country which would not have come in considering the advantages of other countries in terms of infrastructure, cost efficiencies, labor costs or resource availability,” Rodolfo said.
“Incentives can help compensate for the disadvantages of locating in our country. Investors who have availed of incentives have likewise paid revenues on other tax dues coming from their operations. Taxes were paid such as on withholding taxes from salaries, VAT, real estate taxes and the net effect is positive revenue contribution to the government,” he said.
Rodolfo said that in countries like Thailand and Vietnam, investment incentives contributed to achieve rapid growth. Developing countries would even increase incentives to make up for certain infrastructure handicap or disadvantages, he said.