BAGUIO CITY – President Rodrigo Duterte recently vetoed a bill authored by Senator Richard Gordon which seeks to create the Regional Investment Infrastructure Coordinating Hub (RICH) for Central Luzon in lieu of the Subic-Clark Alliance for Development Council.
In his veto message, the president underscored the proposed law has several provisions which would pose substantial fiscal risk to the country and are said to be inimical to its economic growth as envisioned by economists.
“A key lasting economic growth is a tax system with generally low rates and a broad tax base. The subject bill, on the other hand, significantly narrows our tax base with its mandated incentives applicable to the registered enterprises in an entire region,” Duterte said.
The Chief Executive pointed out that the said situation renders the whole system incapable to absorb registered enterprises and the same would necessitate finding new sources of revenue through additional taxes or borrowings in the future which will greatly affect the country’s established fiscal standing.
The President stressed the taxpayers, who are excluded from the tax incentives, “bear the brunt of the burden.”
Duterte also noted that the proposed measure would maintain the proposed fiscal incentives for 50 years, which can be extended for another 50 years.
“Prolonging such a situation for half a century, or more, is likely to bring negative revenue and fiscal implications to succeeding administrations and unnecessarily burden future generations,” he said.
The President claimed it will be unfair to the upcoming generations of Filipinos to bear the burden of the tax incentives provided by the government to investors in selected areas in the country where only a few sectors have benefited in terms of their infrastructures established in the proposed hub.
Duterte said even as the bill espouses the policies being pushed by his administration to increase investor confidence, the measure has provisions that “tend to defeat these very objectives and policies in the long run.”
Gordon, one of the bill’s authors, previously said another key goal of the measure is to decongest Metro Manila by “dispersing industries and population to Central Luzon.”
“The name of the bill reflects its aim to enrich the people by encouraging and promoting investments and infrastructure in Central Luzon, as well as addressing bottlenecks, laying the foundation for long-term growth in the region, creating jobs and improving the quality of life of Filipinos,” Gordon said.
Opposition to a similar bill, Senate Bill 2169, that seeks to create the Greater Baguio-Benguet Development Authority (GBBDA) which is also authored by Senator Gordon were elated over the action of the President on the Central Luzon hub bill considering that almost all of the provisions of the vetoed bill and the one pending for second reading are almost similar, thus, its chances of being vetoed are greater compared to its being signed into law because of its projected undermining of the autonomy of local governments as enshrined in the Local government Code and the rights of the indigenous peoples over their ancestral domain as explicitly provided under the Indigenous Peoples Rights Act (IPRA). By HENT