4 COVID recovery bills pushed

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The Duterte administration is pushing for the passage of four legislative measures to aid in the country’s economic recovery including a bill that aims to reduce the corporate income tax and grant fiscal and non-fiscal incentives to businesses.

President Duterte, in his 11th Bayanihan Act report to Congress released Monday night, said the Executive branch had been “tirelessly working in pursuit of our country’s recovery from the effects of the COVID-19 pandemic” and with the help of the economic managers “pursuing measures to strengthen our economy and to boost the performance and financial standing of our industries.”

Duterte said part of these measures is the PHProgreso program of the National Economic and Development Authority and the Department of Finance which identified four urgent legislative measures that are key components of the recovery plan.

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These are: the Corporate Recovery and Tax Incentives for Enterprises (CREATE), the Rural Agricultural and Fisheries Development Financing Systems Act, the Financial Institutions Strategic Transfer (FIST), and Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE).

CREATE seeks to reduce corporate income tax rates to 25 percent, from 30 percent, starting July 2020; extend the net operating loss carryover up to five years, from the current three years, for small businesses; extended the sunset provision up to nine years and give the President more flexibility in granting a combination of fiscal and non-fiscal incentives.

The Rural Agricultural and Fisheries Development Financing Systems Act or House bill 6134, meanwhile, seeks to remove the distinction between agriculture and agrarian under the Agri-Agra Reform Credit Act of 2009, and free up more capital for the agriculture sector and enhance access to private sector financing by rural communities.

FIST or House bill 6816, aims to set a mechanism to allow banks and other financial institutions to dispose of non-performing loans and assets and transfer such loans and assets to FIST Corporations — which is likened to the special purpose vehicle; while GUIDE seeks to provide financial aid and access to distressed enterprises including micro, small and medium businesses, and “important companies critical to economic recovery.”

As this developed, Presidential spokesman Harry Roque reiterated that the Executive branch supports efforts to come up with an economic stimulus package but emphasized a need to identify sources to fund such programs.

Finance Secretary Carlos Dominguez III had warned against the passage of a P1.3 trillion stimulus package from the House of Representatives due to lack of funding.

Roque said the stimulus package should be sourced from a supplemental budget but under the law, there can be no supplemental budget if there are no identified sources of new revenues to fund it.

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