The Department of Finance will look on the proposed amendments for the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act before its submission to the Office of the President (OP).
This, after think tank Action for Economic Reforms (AER) laid out five main concerns over the bill that was already ratified by the House of Representatives and the Senate.
“As far as I know, this bill has yet to be enrolled by the Legislature and submitted to the OP. We will study the final enrolled bill as well as the items (AER) mentioned,” Finance Secretary Carlos Dominguez told finance reporters in a viber message.
According to him, such items were not part of the original version of the bill and that lawmakers normally tweak or adjust some portions of a proposed bill.
“Yes, we proposed the measure but as you know, the Legislature does not necessarily pass any proposal en toto. We will study the final official enrolled bill,” he quickly added.
AER earlier welcomed the bicameral committee’s approval of CREATE even as it raised questions over some of the provisions on the okayed version.
Among the concerns the think tank pointed out were the exemption on taxes and duties for petroleum refineries and the insertion of crude oil as part of the Strategic Investment Priority Plan or SIPP.
“Exempting local refineries from duties and taxes is discriminatory and swings the advantage towards certain importers. Furthermore, oil refineries are not a part of the SIPP, which defines the activities qualified to receive incentives,” it explained.
“We oppose the insertion of this provision which protects vested interests and was not a part of either the House or Senate bill. If petroleum refineries’ request for tax incentives is a question of policy, it must be subjected to public scrutiny and debate,” it added.
Initial estimates presented by AER show that at least P3.5 billion worth of government revenues could be lost should the state decide to proceed with such incentives.
Other concerns raised by the think tank include the VAT exemption on housing, exemption of legislative franchises’ tax and duty incentives from the powers of the President and the exemption of the same from the jurisdiction of the Fiscal Incentive Review Board.