The economist of the House of Representatives on Monday said Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), the second package of the comprehensive tax reform program, was long overdue.
Albay Rep. Joey Salceda, who heads the committee tasked with raising funds for the government said passage of the measure was needed to enable the country to survive the economic devastation caused by the Coronavirus-2019 pandemic.
Salceda, who chairs the Committee on Ways and Means, said that tax reform had been on the agenda of the Congress “since my first term in 1998 and every Congress from that year,” and that “I have filed some version of this reform.”
“If this passes this year, it will be the culmination of decades’ worth of work, and not some rush to get it done.”
Salceda said that as early as 1998, he filed the “Subsidy Council Act,” which is “the intellectual ancestor of a performance-based, time-bound, targeted, and transparent regime” under CREATE.
“Then as now, I would dare opponents of fiscal incentives reform: Show me your financial statements, and let me see how the reform hurts you, so that we can make adjustments. After all, my career before being a congressman involved analyzing financial statements—so there is nothing there that I will not understand. I’m on my fifth term in Congress now, and no one has taken up that request among all the opponents of the reform.”
He added: “I respect the minority of economists who have reservations about this reform. But the consensus among leading economists and captains of industry has been simple: just get it done now.”
He asked: “What do the critics really want? Do they want to delay the reform? Give everything to the investor? Make the CIT (corporate income tax) cut bigger?”
As for the country’s strategy to lure investors seeking what Salceda calls “economic asylum” from China due to COVID-19 and US-China trade tensions, Salceda said “we cannot attract new investors without ending the uncertainty.
“So, downright, the proposal to delay it (CREATE bill) is a bad idea. If you were an investor, would you invest in a country that keeps postponing tax policy, or would you go to one where the conditions are more certain? We can add sweeteners when we get there.
“Besides, this country has some of the strongest labor and financial fundamentals in the region. And under the new CREATE, there is no chance that we will miss elephant-sized investments like Samsung. But first, let’s get there. After three decades of discussions, let’s pass this now.”