By MA. ELISA P. OSORIO
The Department of Trade and Industry (DTI) defended the tax breaks given to investors saying it is one of the best ways to attract foreign businessmen to locate in the country.
"Everyone in the region (ASEAN) is offering fiscal and non fiscal incentives. We need it to be competitive," Trade Secretary Peter B. Favila told reporters in an interview before he left for Europe.
According to Favila, the competition among ASEAN member nations for foreign locators is very stiff.
If the Philippines will not give similar perks as the ones given by Thailand, Vietnam, Indonesia and the other countries then foreign investors will have less reason to invest in the Philippines.
Meanwhile, Philippine Economic Zone Authority (PEZA) director general Lilia B. de Lima is not convinced there is a need for the House of Representatives to study the tax perks being given by the government.
"Let us not change the rules at the middle of the game," De Lima said in an interview.
Currently, there are four house bills dealing with fiscal rationalization.
All the filed bills agree that there is a need to rationalize/remove old incentives in numerous laws passed over recent decades which drain needed revenue, allow redundant incentives and have created a myriad of incentive-awarding authorities.
It likewise calls for limiting the awarding of income tax holiday (ITH), the need to monitor the application of incentives; and the need for an agency to promote investment, especially to foreign investors.
The Joint Foreign Chambers (JFC) has already expressed its opposition for the cancellation of ITH and has even appealed to President Arroyo to issue a directive making it clear that the government will continue giving ITH to spur economic activity in the country.
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