Action for Economic Reforms (AER) has called on the House of Representatives to explain the delay behind the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Bill, which was passed by the Senate on third reading in November 2020.
In December 2020, the House called for a bicameral conference committee to reconcile the Senate and House versions, committing to pass the bill by January 2021. It has been 63 days since the Senate’s passage of the bill, which lawmakers have been tackling since 2018, when it was packaged as the TRABAHO Bill. Meanwhile, the bill granting San Miguel Aerocity a franchise to build and operate the New Manila International Airport in Bulacan, exempting the company from paying all national and local taxes for up to fifty (50) years, was passed by the Lower House only 28 days after it was filed, and was approved by the Senate a month later.
It is alarming that the San Miguel Aerocity franchise bill was railroaded and passed before CREATE, even if CREATE has been on the table for much longer. It is even more alarming that now, the passage of CREATE is being delayed. We hope this does not signal that insertions are being planned to undermine CREATE and maintain the tax perks enjoyed by San Miguel.
The urgency of the bill’s passage is clear now more than ever, as the Philippine Statistics Authority reported today that the Philippines’ GDP contracted by 9.5% in 2020, its worst economic performance in history. Financial relief is badly needed for firms which have been affected by the pandemic. Moreover, the structural reforms on the rationalization of fiscal incentives are long overdue, and time is of the essence.
The House leadership’s reluctance to discuss the key amendments being negotiated by lawmakers is concerning. Any compromises being currently debated must be disclosed to the public to ensure that the reform measures will not be diluted by those with vested interests.
We urge House Speaker Lord Allan Velasco and the members of the bicameral conference committee to make their positions known on the amendments being discussed in the bicam. We hope that the House leadership is able to clarify that they will not accommodate corporate over public interests.