SENATOR Juan Edgardo Angara assured information and communications technology (ICT) industry stakeholders of objective incentive measurement under the next package of the Tax Reform Acceleration and Inclusion (Train) law.
Angara, at the sidelines of the general assembly of Iloilo barangay captains at SMX Convention Center Bacolod Friday, March 2, said discussions on the tax reform law package two is still in its very early stage thus, stakeholders need not to worry.
“ICT industry is a growth area unlike other industries where the Philippines is not already competitive,” Angara said. “In Congress, we will be very objective in measuring incentives for ICT.”
Under the recently passed package one of the tax reform law, all incentives for industries registered under the Philippine Economic Zones Authority (Peza) economic zones (ecozones), including business process outsourcing (BPO), were placed in status quo.
This allowed registered industries to continue availing value-added tax (VAT) exemption particularly in their local purchases.
Peza director General Charito Plaza had earlier said the law initially sought to impose a 12 percent tax for local purchases, but BPOs and other ecozone industries were worried.
Plaza said it would mean additional production cost and pricing on their goods, making them less competitive.
Local purchases made by Peza registered industries were pegged at P253 billion in 2016, the agency records showed.
“We will lose this amount if they decide to import instead of purchasing it locally because of the 12 percent VAT," Plaza said, adding that under the next package, the Department of Finance is proposing to have a rationalization.
Angara, who was among the authors of the law creating the Department of Information and Communications Technology, said the number of jobs the industry created clearly manifests that ICT is really competitive.
“We want to incentivize those creating jobs and increase the income of our workers. Jobs and income will be our lens in reviewing the incentives policy,” he added.
The senator said it is possible that the government could even provide more incentives given that ICT has been considered as a worth growing industry.
Citing the huge potentials of ICT, Angara said it can be linked to other sectors like health, pharmaceutical, legal, medical, engineering, and architecture, and engineering.
“Investors all over the world will outsource the best talent and cheapest labor available where the Filipinos are good at,” he said.
Angara pointed out that the Peza, which also accredits other types of industries aside from ICT, was previously positioned to help manufacturing sector to grow.
Thus, it is good to review the incentives provision as a “whole” because it is possibly geared towards manufacturing only.
The jobs of the future also involve other industries like tourism, agriculture, and information technology, he added. (EPN)