In a bid to fuel greater foreign direct investments (FDIs) in the Philippines, Special Assistant to the President for Investment and Economic Affairs Frederick Go is vouching for the comprehensive review of existing policies to enable ease of doing business (EODB).
"There should be a day when everyone's just looking at old laws and seeing whether they're obsolete or archaic or irrelevant. It burdens the public, burdens enterprise. Too many regulations," Go told reporters at the sidelines of the EODB briefing with the Anti-Red Tape Authority (ARTA) on Jan. 24.
He stressed the confusion experienced by many people about which laws to follow because they overlap or they conflict.
To address this, Go said his office is working with the House of Representatives and the Senate to bring uncertain laws to light and provide clear policies that will protect investors and their investments.
Specifically, he mentioned the restoration of the powers of investment promotion agencies (IPAs) such as the Philippine Economic Zone Authority (PEZA) and Board of Investments (BOI) over the locators in their respective economic zones.
"This will enable IPAs to protect companies from regulatory inconsistencies and ambiguities, as well as excessive bureaucracy and red tape, as well as reduce the processing time for incentive applications and revert us back to the pre-paying regime," he explained during his presentation.
In relation to this, Go is also cooperating with Congress to clarify the transitory provisions in the current Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) Law.
"We are also working with Congress to explicitly state that the non-income tax-based incentives, particularly VAT zero rating, VAT exemption, and duty exemption, are not subject to the sunset period, and that registered business enterprises may enjoy them for as long as they are registered in good standing with an IPA," he said.
He noted that they are considering a sunset period of 12 years for pre-paid enterprises to enjoy their incentives, in order to allow proper transition from abrupt changes in laws.
He and Congress are also reviewing current value-added tax (VAT) rules, particularly on the coverage of VAT zero rating incentives, to streamline the VAT refund process and allow reconsideration requests from claimants.
Talks are also being made with the Bureau of Customs (BOC) to reform customs administration such as pre-order inspections and digitalized invoicing; as well as encourage listing and participation in the country's capital markets.
One such approach is through reducing the government's current sales tax from 0.6 percent to 0.1 percent.
"When we benchmarked it with the rest of our peers in Southeast Asia or Asia, we noted that the sales tax for transactions is much lower or non-existent in many other markets. So the belief of the stakeholders of the capital markets is that the 0.6 percent tax causes a lot of friction," said Go.
"My belief is that when you reduce the friction cost, you encourage more volume of transactions," he added.
With the benchmark creation of a sole investments unit under Malacanang, Go is vying to earn investments in five priority sectors namely mining, steel, microelectronics, agriculture and pharmaceuticals.
Go echoed the government's eagerness to emulate Indonesians roadmap for downstream nickel processing; and develop the country's current capacities in assembly, testing, and packaging of semiconductors.
Boosting agriculture production for all commodities by increasing post-harvest facilities and improving logistical chains to bring farmed produce to markets is being furthered explored.
The growth of the steel industry is, as Go described, "basic and necessary."
As for pharmaceuticals manufacturing industries, the office aims to implement ways to reduce costs of medicine for universal healthcare.
"Looking ahead, the actual amount of investments we will secure will be the true barometer of our efforts to improve the ease of doing business," said Go.
He remarked that the stage is set for the Philippines to be open for more businesses.
"To attract strategic investments, there is an urgent need to harmonize interagency activities to be able to actualize what we repeatedly refer to as the whole-of-government approach. Nothing less is needed to achieve our objectives," added Go.