By Argyll Cyrus Geducos
President Duterte has decided to veto the measure which proposed to create the Regional Investment and Infrastructure Coordinating Hub of Central Luzon as it may have a negative effect in the country’s economy.
In his veto message dated March 13, Duterte recognized that the said hub would seek to attract more private investors to support infrastructure projects. However, he said the law only reiterates the role of the “Build, Build, Build” program.
“This Administration fully recognizes the significant role of private investors in the economy. Such recognition is underscored by a number of policies that are meant to increase investor confidence and improve the ease of doing business in the country,” he said.
“Equally significant in the pursuit of investments are the on-going infrastructure projects under the “Build, Build, Build” program of this Administration which seeks to enhance the country’s infrastructure, this being an important factor in attracting investments,” he added,
“I cannot support the bill considering the provisions therein that tend to defeat these very objectives and policies in the long run,” he continued.
According to the President, the bill also has several provisions which would pose substantial fiscal risks to the country and are thus inimical to its economic growth.
A key to lasting economic development is a tax system with generally low rates and a broad tax base. The subject bill, on the other hand, significantly narrows our tax base with its mandated incentives applicable to registered enterprises in an entire region,” Duterte said.
“This renders the whole system incapable of generating a yield sufficient to sustain the country’s social and economic infrastructure, and this would necessitate finding new sources of revenue through additional taxes or borrowings in the future,” he added.
“In the end, it is the taxpayers all over the country, who are excluded from the tax incentives, that will bear the brunt of the burden,” he continued.
Duterte also said that the proposed bill would maintain the mandated fiscal incentives regime for 50 long years, and this period may ever be extended for yet another half-a-century.
He said prolonging such situation for 50 years would likely bring negative revenue and fiscal implications to succeeding administrations and unnecessarily burden future generations.
“What we seek is a tax system that would alleviate the tax burden of our citizenry, one that prescribes a reasonably low rate that can compete with our neighboring states, while at the same time would sufficiently capacitate the government to fully implement programs and projects for the social and economic well-being of our people,” he said.
“We need a tax system that will attract the right kinds of investment that will truly benefit the majority of our people throughout the country,” he added.
This can only happen by switching our attention to a more fiscally disciplined policy that, in the end, will be favorable for everyone. The goal is to create opportunities for all that empower even the simplest contributor to our economy,” he continued. (Argyll Cyrus B. Geducos)