House Ways and Means Committee chair, Albay Rep. Joey Sarte Salceda, pushes for resiliency-building innovations in the priority list under the newly approved Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, to do away with ‘dead industries’ and create new ones that will be resilient to shocks such as the Covid-19 pandemic.
Salceda, principal author of the CREATE Act (RA 11534), said focus should be given more on biotech and agricultural productivity, industry apprenticeships and technology transfer, and resiliency-building innovations in industries aided by research and development.
The lawmaker-economist said he is now working with the Department of Trade and Industry (DTI) in crafting the new investment “promo brochure,” which is the list of priority industries under CREATE Act.
“Like many great historical events, Covid-19 has made many industries redundant. The key to national development is not to resurrect dead industries but to create new ones. The root word of innovation is ‘new.’ We need new life in our economy, so we need new industries,” Salceda stressed.
He said he is “definitely pushing for innovations in food and agriculture, manufacturing, financial technology, sanitation, healthcare, and education to be part of the SIPP (Strategic Investment Priorities Plan).”
Soon after CREATE Act was signed by President Duterte last week of March, Salceda said he started working with the DTI, particularly the Board of Investments (BOI), to craft the SIPP, which includes the list of sectors that will qualify for incentives under CREATE.
“I am in touch with the DTI and the BOI. I’ll help them complete the list as soon as possible, hopefully within the month,” he said, adding he had earlier asked the BOI to release the initial list of Covid-19 pandemic responsive industries eligible for incentives under CREATE Act.
“Then (BOI should) cite economic recovery as a supervening event later. I just had a conversation with the Budget Secretary yesterday, and he believes we should expedite incentives for virology-related and Covid-19 biotechnology-related sectors. That’s perfectly doable,” Salceda said.
Under the CREATE Act, which takes effect April 12, the BOI is mandated to craft the SIPP, which determines the qualification and the length of incentives an enterprise will receive. He said the SIPP will basically be the promo brochure our investment promotion agencies use to invite investors into the country. “This is urgent work. We have to create new jobs now,” he emphasized, adding he wants to use the SIPP to prepare the country’s economy for shocks similar to Covid-19.
“This will not be the last pandemic. As we destroy more habitats, and human settlements meet wildlife more, we will see more diseases. It will take time to reverse the ecological damage we tolerated. So, we have to prepare for the consequences in the meantime,” Salceda said.
“That means more investment in research and development, particularly for medicine. You see, even if we develop vaccines, diseases always mutate and evolve ahead of our research. Therapeutics will bring us back to the old normal, so we need to invest in cures. The SIPP should reflect this national priority,” he pointed out, even as the provision that the President can grant special incentives to very big investments is now in effect.
Salceda urges investors “who are looking to invest $1 billion in the country to already talk to the applicable investment promotion agency,” and the BOI “to complete the list as soon as possible, since the SIPP is like the storefront sign that says ‘we are open for business,’”
The CREATE Act also reduces the corporate income tax (CIT) rate to 20% from 30% for domestic corporations with net taxable income of P5 million and below and have total assets of P100 million and below, effective July 1, 2020. All other local firms and resident foreign companies are imposed the 25% income tax rate.