Firms hope for tax breaks, better vaccine rollout

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By Keren Concepcion G. Valmonte, Reporter

FIRMS are hoping the administration can introduce more programs to help businesses weather through and recover from effects of the coronavirus disease 2019 (COVID-19) on their operations.

“It does not need to be in the form of cash handouts but through tax breaks,” DFNN, Inc. President and Chief Executive Officer Calvin Lim said in an e-mail interview.

“Some industries are harder hit than others, therefore requires more tax breaks incentives,” he said, citing the tourism and entertainment industries.

Prior to the health crisis, most industries were said to be doing well because of low inflation, strong private consumption, and increased public infrastructure spending.

LT Group, Inc. (LTG) President and Chief Operating Officer Michael G. Tan said the country saw an” improved” peace and order situation.

“The campaign against illegal drugs [has] contributed to boosting investor confidence,” Mr. Tan said in a separate e-mail. “In one of our businesses, for example, the campaign against illicit cigarette traders has brought billions of pesos into the national coffers.”

The pandemic threw a “curveball” to the country’s growing economy and the prospects of businesses.

“The virus disrupted our positive momentum, but recent developments give us hope, like the low interest rates, passage of the CREATE (Corporate Recovery and Tax Incentives for Enterprises) law, signing of EO (Executive Order) 130, and [a] renewed commitment to the Build, Build, Build program,” Isidro A. Consunji, chairman and president of DMCI Holdings, Inc., said in another e-mail interview.

In March this year, President Rodrigo R. Duterte signed into law the CREATE Act, which took effect on April 11. It reduces corporate income tax to 20% or 25% from 30%, which helped give businesses a “boost.”

“[It allows us to] be able to reinvest whatever savings we can get from corporate income tax to projects that will help us. For example, capital expenditures — that can help us enhance our capacity to serve the market both domestically and abroad and provide more jobs,” Gregory H. Banzon, executive vice-president and chief operating officer at Century Pacific Food, Inc. (CNPF), said over a video call.

This forms part of the administration’s Comprehensive Tax Reform Program, with the initial package granting a reduction of income tax via the TRAIN (Tax Reform for Acceleration and Inclusion Law) Law.

“Before the new TRAIN & CREATE Law, the Philippine corporate tax rate was one of the highest in the region bringing it down a very progressive step forward in allowing innovation to take place and makes [the] Philippines a more welcoming economy,” Mr. Lim said. “The business community reacted positively as the economy grew in the region of 6-7% per year.”

Revenues from TRAIN are said to be funding value-added tax (VAT)-exempt medicines, social services, improve and build more educational and healthcare facilities. Incremental revenues are funding the country’s Build, Build, Build infrastructure program, which business leaders are lauding.

Meanwhile, business leaders are calling for the increased focus on vaccinating the population to allow the economy to reopen.

“To help MSMEs (micro, small and medium enterprises) get back on their feet, the government should focus on inoculation, standardization of LGU (local government unit) COVID-19 protocols, and easing restrictions among fully vaccinated individuals,” Mr. Consunji said.

CNPF’s Mr. Banzon said he supports the idea of having a vaccination pass to allow those who have been vaccinated to help drive consumer demand. Citing the company’s research, he noted consumers still feel restricted because of either the lockdowns or the country’s pace in vaccinations.

“Vaccination is the answer and the government cannot do it alone,” LTG’s Mr. Tan said. “The private sector is here to help and partner with the government.”

Meanwhile, DFNN’s Mr. Lim is hoping to see more developments in the technology sector by investing heavily in digital infrastructure like other governments.

“The pandemic caused a knee-jerk and almost complete dependence on digital technology,” he said. “The private sector adapting through its use of digital technology may be a significant part of the puzzle in building back our battered economy.”

With less than a year left for Mr. Duterte in office, business leaders are hoping infrastructure developments would still be a priority for the next administration.

“If we want to transform the country, there is no other choice but to improve and expand our road networks, mass transit systems, water sources, etc.,” DMCI Holdings’ Mr. Consunji said.

Meanwhile, LTG’s Mr. Tan hopes the next administration would prioritize a COVID-19 response program in restoring the economy, saying public-private partnerships will be the key.

“What we have been through during the pandemic has taught us a valuable lesson,” he said. “From mass testing to vaccination, the government and the private sector working together can serve the Filipino people better. I wish the next administration can bring this forward.”

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