PRESIDENT Rodrigo Duterte has vetoed a measure seeking the creation of an investment and infrastructure coordinating hub in Central Luzon.
Duterte, in a March 13 letter sent to the Senate and the House of Representatives, said the bill contains several provisions "which would pose substantial risks to the country and are thus inimical to its economic growth."
"This administration fully recognizes the significant role of private investors in the economy. Such recognition is underscored by a number of policies that are meant to increase investor confidence and improve the ease of doing business in the country," the President explained in his letter.
"However, even as the bill espouses the same growth objectives and policies stated above, I cannot support the bill considering the provisions therein that tend to defeat these very objectives and policies in the long run," he added.
The proposed measure from Congress intends to establish Regional Investment and Infrastructure Coordinating Hub, which will serve as the body to lead infrastructure development in Central Luzon.
The proposed infrastructure hub aims to replace the Subic-Clark Alliance for Development Council.
Duterte said the proposed measure "significantly narrows our tax base with its mandated incentives applicable to registered enterprises in an entire region."
"This renders the whole system incapable of generating a yield sufficient to sustain the country's social and economic infrastructure, and this would necessitate finding new sources of revenue through additional taxes or borrowings in the future," the President said.
"In the end, it is the taxpayers all over the country, who are excluded from the tax incentives, that will bear the brunt of the burden," he added.
Duterte likewise stressed that the bill would maintain the proposed fiscal incentives for 50 years, which was "likely to bring negative revenue and fiscal implications to succeeding administrations and unnecessarily burden future generations."
He emphasized that the goal was to "create opportunities for all that empower even the simplest contributor to our country."
"What we seek is a tax system that would alleviate the tax burden of our citizenry, one that prescribes a reasonably low rate that can compete with our neighboring states, while at the same time, would sufficiently capacitate the government to fully implement programs and projects for the social and economic well-being of our people," Duterte said.
"Further, we need a tax system that will attract the right kinds of investment that will truly benefit the majority of our people throughout the country. This can only happen by switching our attention to a more fiscally discipline policy that, in the end, will be favorable to everyone," he added. (SunStar Philippines)