BusinessMirror October 16, 2020

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Special defense ecozone faces rough sailing A S the Senate continues its debate on the proposed Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, the Department of Finance (DOF) once again expressed its opposition to the proposed Special Defense Economic Zone (SpeDEZ) Act, saying the bill runs counter to their current tax reform proposal to rationalize incentives. The measure seeks to establish a special defense economic zone inside the government arsenal defense industrial estate located in Camp Gen. Antonio Luna in Limay, Bataan. Relaying the key points of DOF’s posi-

WITH Skyway Stage 3 now complete, the Edsa Decongestion Program is well underway, Public Works and Highways Secretary Mark Villar said on Thursday as he inspected a section of the 18-km link between the northern and southern portions of Metro Manila. Story on page A8. PHOTO COURTESY OF DPWH

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tion paper on the bill, Finance Director Rowena S. Sta Clara on Thursday told the Senate Committee on Finance, “The policy of creating economic zones as a tool to promote the development should be viewed not just in the context of investment and jobs generated but also in terms of to the government of establishing the same.” The tax incentive provisions, Sta. Clara said, “are not aligned with the current tax reform proposal of the DOF under the CREATE, which aims to rationalize the country’s incentive system to make it performance-based, targeted, time-bound and transparent system.” Apart from the proposed tax incen-

tives, the proposed creation of Special Defense Economic Zone Authority (SpeDEZA) also did not sit well with the DOF. “The creation of SpeDEZA as another governmental body is no longer necessary. The Philippine Economic Zone Authority [Peza] was created to provide the legal framework for the creation, operation, administration and coordination of economic zones in the country,” Sta. Clara said. “Hence, the proposal would duplicate the functions of Peza and runs counter to government efforts in streamlining the bureaucracy and promoting fiscal prudence in the allocation of resources.” The finance official also said they fa-

vored scrapping the proposed provision exempting SpeDEZA-registered manufacturers and suppliers of defense equipment and materials from the provisions of Republic Act 9184 or the Government Procurement Reform Act. “We recommend the proposed exemption be removed as under Section 4 RA 9184, procurement activities of all government agencies and entities shall be governed by the provisions of the law. This is to promote good governance, transparency, accountability, equity efficiency and economy in the procurement process,” she said.

See “Defense,” A2

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ERRING RICE IMPORTERS DELAY PAYING CHARGES www.businessmirror.com.ph

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Friday, October 16, 2020 Vol. 16 No. 8

Salceda to Senate: CREATE can’t wait

By Bernadette D. Nicolas

HE Bureau of Customs (BOC) said some erring rice importers have availed themselves of legal remedies to avert paying charges for their “undervalued” shipments last year, as farmers pressed authorities to move more quickly against violators to plug the huge revenue drain of the government.

By Jovee Marie N. Dela Cruz

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HE chairman of the House Committee on Ways and Means on Thursday urged the Senate to now approve the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, saying the lower chamber is always ready to adopt the Senate version of the proposal, if only to fast-track its approval. Albay Rep. Joey Sarte Salceda reiterated that CREATE is one of the “legislative imperatives” that economic managers identified for the country’s economic recovery amid the pandemic. He stressed that the House is ready to accept a fiscally sustainable Senate version. The Senate is currently deliberating its own version of CREATE, and many amendments to the bill are causing prolonged discussions. The first plank of CREATE— immediately cutting by 5 percent the corporate income tax (CIT) of 30 percent—has universal support. The proposal further offers more flexible incentives, with an immediate 5-percent income tax slash, after which the CIT will be reduced by 1 percent every year from 2023 to 2027 until it reaches the 20-percent mark. However, the bill’s second major plank, the rationalization of tax incentives, has drawn a lot of controversy, with business groups saying it’s untimely to deprive investors and economic zone locators of incentives while the economy gouged by the pandemic quarantines is struggling to survive. On Thursday, Salceda sought to push the pace of Senate approval faster. He said, “We will adopt it

Customs Assistant Commissioner and spokesman Vincent Philip Maronilla told the BusinessMirror on Thursday they have yet to collect the total P1.4 billion charged to over 40 erring rice importers, majority of which are farmers’ cooperatives. However, Maronilla has yet to disclose exactly how many of the rice importers resorted to the legal remedies and how many of those who availed themselves of legal remedies are farmers’ cooperatives. Continued on A2

PIRACY MAY BE COSTING SUBSCRIPTION VIDEO ON DEMAND IN PHL $120M

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By Rizal Raoul Reyes

HE Philippines ranks third among East and Southeast Asian countries in terms of subscription video on demand piracy, which restrains the growth of the creative industry and deprives the government of tax revenues, a trade association disclosed in a virtual briefing. “While legal SVOD [subscription video on demand] monetization is growing, piracy remains pervasive in the Philippines,” Neil Gane, general manager of Asia Video Industry Association’s (AVIA) Coalition Against Piracy, said in a virtual roundtable on Thursday organized by Stratbase Albert del Rosario Institute. AVIA is an industry association composed of multichannel TV broadcast, digital multichannel television, content, platforms, advertising and video delivery service providers across Asia. Although the Media Partners Asia report indicates that SVOD is projected to become a $250-million industry in the Philippines this year, Gane pointed out that the industry would lose about $120 million to piracy. “Piracy is depriving SVOD of $120 million in revenue per annum, more than 90 percent of the current legal opportunity,” Gane said in his presentation titled “Digital Risk in the New Normal.” He said legal SVOD has been growing in the country, led by current players such as Netflix, Viu, HBO Go and Prime

Continued on A2

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A DOG and its owner are seen on Sumulong Highway in Antipolo City with the times’ new normal getup—face mask and face shield, quarantine pass and hand sanitizer—as public health orders remain in effect to stop the spread of Covid-19. BERNARD TESTA

Continued on A2

See “Salceda,” A2

n JAPAN 0.4626 n UK 63.2974 n HK 6.2740 n CHINA 7.2424 n SINGAPORE 35.8313 n AUSTRALIA 34.8384 n EU 57.1369 n SAUDI ARABIA 12.9627

Source: BSP (October 15, 2020)


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