Congress eyes tax incentives, BOC reform
Congressional leaders agreed to work on measures streamlining incentives for investors, and bills reforming the Customs bureau


ECONOMIC BILLS. Senate President Franklin Drilon says congressional leaders agreed to work on economic bills including measures streamlining incentives for investors, and bills reforming the Bureau of Customs. File photo by Cesar Tomambo/Senate PRIB

MANILA, Philippines – Congressional leaders vowed to prioritize bills consolidating tax incentives for investors, and reforming institutions like the corruption-tainted Bureau of Customs (BOC).

Senate President Franklin Drilon said he and House Speaker Feliciano Belmonte Jr agreed to work on economic measures that will ensure sustainability of economic growth, and improve the business climate.

Drilon cited the Consolidated Investments and Incentives Code of the Philippines, and the Tax Incentives Management and Transparency bill.

“There is a need to reassess and harmonize our numerous fiscal and non-fiscal incentives and subsidies to foreign and local investors to avoid overlapping and redundant incentives to cut unnecessary revenue loss,” Drilon said in a statement on Sunday, February 9.

The Senate President also said Congress will work on bills amending tax laws on mining. The Aquino administration said in 2012 that it will push to increase government’s share in mining revenues through a mining reform bill but this has yet to be passed.

“There is a need to study the practice of mining-intensive countries where higher excise taxes have not dissuaded investments at all, while making funding for government projects bigger,” said Drilon, a staunch Aquino ally.

Congress is also targeting “massive reforms” in the BOC and other government institutions related to finance and the economy. Pending before Congress are bills overhauling the BOC, and strengthening the Bangko Sentral ng Pilipinas’ (Central Bank of the Philippines) supervisory and regulatory powers.

“We are looking at restructuring important institutions to halt the economic damage from rampant money laundering, smuggling and other financial crimes in the country,” said Drilon.

For years now, the BOC has drawn controversy over smuggling incidence. Congress is investigating rice smuggling, after the Philippines lost P8.4 billion in 2012.

In the Social Weather Stations 2013 Enterprise Survey on Corruption, the bureau remained the worst perceived agency attempting to fight corruption, and its rating dipped further from “poor” to “very bad” in the eyes of businessmen.

Customs Commissioner John Philip Sevilla promised to reform the agency through measures including uploading transactions online. The BOC also filed cases against rice smugglers

EPIRA, shipping, consumer bills

Drilon said Congress also wants to amend the Electric Power Industry Reform Act (EPIRA), the 12-year-old law that restructured the power industry.

Lawmakers began looking into the issue after the P4.15 rate hike of power distributor Manila Electric Company (Meralco) drew the ire of consumers and militant groups last December 2013. The Supreme Court temporarily stopped its implementation, and is deliberating on the legality of the rate hike.

Some lawmakers and civil society groups blamed the EPIRA for the Philippines’ expensive power rates – one of the highest in Asia – and said the law allowed monopoly in the industry.

Drilon said legislators will also address loopholes in the Build-Operate-Transfer law to align policies with the administration’s Public-Private Partnership (PPP) scheme, explore more effective PPP projects, and “fix interconnectivity issues.”
“Similarly, we must amend the Cabotage law to allow foreign-registered vessels to engage in coastwide trade in the country, thereby opening the market to competition, bringing down transportation costs by sea, and enabling the country to fully utilize supply chain products,” Drilon said.

Under the Cabotage Law in the Philippine Tariff and Customs Code, foreign vessels are prohibited from plying domestic shipment routes.

Also on Congress’ priority list are the Consumer Protection Act, an Anti-Trust Act, and the promotion of micro, small and medium enterprises.

In their meeting last Thursday, congressional leaders agreed to meet every month “to synchronize and integrate their legislative activities” and ensure the passage of priority bills. 

Besides the economic bills, Congress agreed to prioritize the following measures:


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