The House committee on ways and means yesterday approved the tax exemptions and profit -sharing scheme for the P734-billion New Manila International Airport in Bulacan of San Miguel Corp.
Voting 25-2, congressmen cleared the tax provisions of the draft substitute bill on the franchise granting permission to SMC’s plan to put up an international airport in the coastal areas of Bulakan.
“The final report that came out of the tax committee is significantly more tempered than the original. On its own, the project was already going to be beneficial, as a P740-billion infrastructure investment that will come entirely out of the private sector’s hands. That’s 4 percent of GDP. In return, we are being asked to provide some tax concessions. By tempering the tax provisions, we made sure that the Filipino people will get even more economic benefits for less taxpayer cost,” said Joey Salceda, committee chairman.
Salceda said by making the tax provisions fairer, “we are making sure the public gets more returns from this project.”
The House panel also approved the profit-sharing scheme which, anything beyond the 12 percent rate of return will be subject to 50-50 sharing between government and the private sector proponent.
Salceda added it is critical that all other income derived outside airport operations should be taxed regularly. These include the hotels and restaurants in the surrounding Airport City.
“We want to make sure that the franchise’s tax privileges only extend to the airport operations,” Salceda said.
Meanwhile, the Private Public Partnership (PPP) Center has assured the committee the government will not have financial obligations to SMC.
Salceda’s tax body also promised the committee on legislative franchises it will look into “the social impact on the communities directly affected by the project; the estimated forgone revenues due to the tax exemptions to be granted under the measure; the projected employment generation; and the determination of the “competent authority” which will decide when the tax exemptions for the grantee will expire.
Meanwhile, SMC said it is on track to start the construction of the airport this year. The airport, to be completed between four and six years will complement the operations of the Ninoy Aquino International Airport and the Clark International Airport, as it could accommodate 100 million to 200 million passengers annually.
The new gateway will have four parallel runways for faster turnover of aircraft, eight taxiways.