After a series of long debates, the Senate finally passed a bill lowering the corporate income tax and rationalizing fiscal incentives.
Senate Bill 1357 or the proposed Corporate Recovery and Tax Incentives Reform Act (CREATE) was approved on third reading in a 20-1 vote, with Senator Dick Gordon as the lone dissenter.
Senator Pia Cayetano, the sponsor of the measure, rejected the amendments proposed by Senator Richard Gordon, who wanted to remove export-centered freeport zones, such as the Subic Bay Metropolitan Authority, which he used to head, from the influence of the Fiscal Incentives Review Board (FIRB), which approves tax incentives.
“”I respectfully cannot accept these amendments because the whole essence of create is to be able to have all the IPAs (investment promotion agencies) accountable, and to make their filings their submissions to the FIRB so that precisely FIRB can ensure that these IPAs are being accountable,” she said.
Cayetano said she already agreed to some concessions.
“So for those reasons I respectfully have the decline, Mr President,” she said.
The bill seeks to decrease corporate income taxes from 30 percent to 25 percent and make incremental decreases until it reaches 20 percent in 2027.
It also rationalizes fiscal incentives by making them time-bound and performance-based.
The Senate was supposed to approve the measure late Wednesday but agreed to defer its passage to accommodate Gordon’s proposed amendments.
Gordon’s appeal to his colleagues to consider his proposed changes led to a vote among the senators, but he lost 14-5.
The House of Representatives passed its own version of the bill last year.