Press Releases

Salceda to US investors: PH committed to Ease of Doing Business, wants stronger partnerships with US companies; House tax panel chair promotes “Four Eases” policy for government modernization

October 29th, 2022

House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) was the concluding resource person for the US-ASEAN Business Council’s Philippine Business Mission, which was held at the Grand Hyatt Hotel, in Taguig City, on September 28, 2022. The Mission, which conducts interviews between leading US companies and top Philippine decisionmakers, consulted Salceda on a variety of economic, fiscal, and strategic issues.

Salceda particularly reassured members of the American business community in the Philippines that the House tax panel, which Salceda chairs, will deliver on key measures and interventions that could improve ease of doing business and investment attractiveness of the country.

“I assure the Council: on areas where the national interest and your interests align, we will deliver,” Salceda said.

The council members raised certain tax-specific issues to Salceda, which the House tax panel chair gave prompt responses to.

On tax breaks for US companies that provide more COVID-19 benefits to their workers, Salceda assured the council that “The Committee can help ensure that spending on such benefits is fully deducted (100%) as operating/labor expenses by mandating the BIR to issue simpler and clearer rules for substantiating these expenses.”

Following suggestions that the lower minimum corporate income tax under the CREATE Law be extended, Salceda assured that “the committee will study the proposal to extend MCIT but makes no guarantees, in light of tight fiscal space and the possible impacts of an announced tax break on confidence in the country’s fiscal strength.”

On problems with differing interpretations on VAT-exempt COVID-19 imports, Salceda requested “that the conflicts of interpretation be pointed out. If there are significant differences of interpretation, the Chair commits to calling for a briefing to unify these interpretations.”

Boosting digital investments

Salceda also committed to work with the Department of Trade and Industry towards a Digital Investments Program which the council requested.

“The committee supports the recommendation towards a Digital Investment Program,” Salceda said.

“The Chair has also expressed to the DTI that the strategic investment priorities plan cannot be merely a list, but must be a full strategy. A Digital Investments Program including both fiscal and non-fiscal incentives can be a section of the comprehensive SIPP.”

Salceda also cited the Committee’s role in boosting investments in startups and tech services, citing the committee’s decisive role in getting the Fiscal Incentives Review Board to craft regulations on allowing BPOs to work from home while sustaining their tax perks. The Committee also took the lead in creating the country’s tax regime for Employee Stock Option Plans, a compensation option that many tech startups take at the pre-profitable stages.

Pushback on new ecozones and looser rules

Salceda, however, pushed back on the request for amendments to the Special Economic Zone Act, saying that he “generally believes that ecozones should be significantly reduced in number and be focused on manufacturing, as services can locate anywhere in the country.”

Salceda also cited that there are at least 416 ecozones in the PH, 10 in Thailand, 3 in Malaysia, 18 in Indonesia, making looser rules a significant smuggling and tax leakage risk.

Ease of doing business

Salceda reiterated his commitment, however, towards ease of doing business, including his “Four Eases” – Ease of Paying Taxes, Ease of Citizen Services such as business registration, Ease of Social Services, and Ease of Procurement.

Salceda cited his House Bill No. 419, or the Government Modernization Act, as a measure that aims to reengineer government towards these Four Eases, and asked the council to study and support the measure.

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