This is an article repost.
The proposed bill on the Investments and Incentives Code of the Philippines (House Bill No. 4935) has recently passed third and final reading.
The bill, which Rep. Susan Yap (2nd District of Tarlac) filed as House Bill No. 938, was basically adopted by the Ways and Means Committee in codifying the array of incentives that will be made available to both domestic and foreign investors.
In essence, the bill seeks to accomplish three things: create a uniform policy on the grant of fiscal incentives to investors by consolidating and rationalizing investment priorities; provide a formula that balances the need to attract investments through fiscal incentives, while maintaining fiscal prudence; and establish a framework that will encourage a stable, predictable and enhanced investment regime to spur the sustained economic growth and development of the country, making it competitive with other ASEAN countries.
In a recent speech addressed to members of the Philippine Chamber of Commerce and Industry, Rep. Yap stressed that, “the proposed Incentives and Incentives Code is designed to lay the foundation for businessmen and investors to adapt and innovate. It breaks down the barriers that stand in the way of success.”
“What we are doing here is the removal of existing outdated and unnecessary regulations. The provisions of the Investments Code will strike out rules on the book that are needlessly stifling job creation, profit generation, and economic growth,” according to Rep. Yap.
With the incentives under House Bill 4935, even considering the lack of infrastructure, the Philippines may now be able to compete with its ASEAN neighbors, most especially with Thailand and Vietnam, because of the longer tax holidays and tax reduction afterward and the VAT and duty exemptions or refunds.
This crusade is in consonance with the observation of various sectors (including IMF and World Bank) that the government should start streamlining or rationalizing the incentive package it offers to investors because the current framework complicates the system and renders tax administration inefficient.
“More than ever before, our potential to becoming a global economic force is becoming apparent. With all of the benefits and the clear cut rules the Investments and Incentives Code could offer to the entrepreneurs and investors, now is the time to invest in the Philippines,” urged Rep. Yap.
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By: The Office of Rep. Susan Yap
Source: Press Release, Public Relations and Information Bureau, House of Representatives, Congress of the Philippines, Aug. 18, 2011
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To read more about the Rationalization of Fiscal Incentives, see Part IV: General Business Environment – Legislation.
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