THE House Comittee on Ways and Means is now working with the Department of Trade and Industry (DTI) in crafting the investment “promo brochure” or the list of priority industries under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
House Committee on Ways and Means Chairman Joey Sarte Salceda of Albay, principal author and sponsor of the CREATE Act, said he will push for resiliency-building innovations in the priority list.
“Like many great historical events, Covid-19 has made many industries redundant. The key to national development is not to resurrect dead industries but to create new ones. The root word of innovation is ‘new.’ We need new life in our economy, so we need new industries,” Salceda said.
“Definitely, I am pushing for innovations in food and agricultural manufacturing, financial technology, sanitation, healthcare, and education to be part of the SIPP,” he added.
The lawmaker is now working with the DTI, particularly the Board of Investments (BOI), to craft the Strategic Investment Priorities Plan (SIPP), which is the list of sectors that will qualify for incentives under CREATE.
“I am in touch with the DTI and the BOI. I’ll help the complete the list as soon as possible, hopefully within the month.”
Under CREATE, recently enacted as Republic Act No. 11534, the BOI is mandated to craft the SIPP, which determines qualification and the length of incentives an enterprise will receive.
“The SIPP will basically be the promo brochure our investment promotion agencies use to invite investors into the country. This is urgent work. We have to create new jobs now,” Salceda said.
Meanwhile, the lawmaker said he wants to use the SIPP to prepare the country’s economy for shocks similar to Covid-19.
“This will not be the last pandemic. As we destroy more habitats and human settlement meets wildlife more, we will see more diseases. It will take time to reverse the ecological damage we tolerated. So, we have to prepare for the consequences in the meantime,” Salceda said.
“That means more investment in research and development, particularly for medicine. You see, even if we develop vaccines, diseases always mutate and evolve ahead of our research. Therapeutics will bring us back to the old normal, so we need to invest in cures. The SIPP should reflect this national priority,” he said.
In the meantime, he said the provision that the President can grant special incentives to very big investments is already in effect.
“I urge investors who are looking to invest $1 billion in the country to already talk to the applicable investment promotion agency,” Salceda said.
“I urge the BOI to complete the list as soon as possible. Completing the SIPP is like the storefront sign that says ‘we are open for business,” he added.
Under CREATE, the corporate income tax (CIT) rate is reduced to 20 percent from 30 percent for domestic corporations with net taxable income of P5 million and below and have total assets of P100 million and below, effective July 1, 2020. All other local firms and resident foreign companies are imposed a 25-percent income tax.