Sen. Panfilo Lacson has alerted his colleagues to the contradictions in the tax provisions of the Corporate Recovery and Tax Incentive for Enterprise (CREATE) bill and the Aerocity franchise bill.
The Senate is tackling the CREATE bill for final approval, while it approved on second reading the measure for the construction of a major airport facility in Bulacan.
Although the franchise of the San Miguel Aerocity Inc. to build the international airport has been approved on second reading, some senators noted its impact on the CREATE bill, which is also a priority for approval by the Senate.
During the Senate interpellation on Wednesday for the final plenary approval of the SMC aerocity franchise, Lacson questioned the contradicting provisions in the two priority measures.
The tax incentive provision under the CREATE bill, which was submitted earlier to the Senate, is contrary to the numerous tax incentives to the Ramon S. Ang-owned firm under the airport franchise bill, the senator asserted.
Lacson particularly mentioned the CREATE bill provision removing some fiscal incentives in additional income generating government ventures in exchange for lower corporate income taxes for private businessmen.
The House of Representatives, supported by the Senate, passed on second reading the airport franchise bill, which would give SMC Aerocity tax privileges amounting to an estimated P118 billion within 50 years.
Under the franchise bill, the company owned by Ang would enjoy P38 billion in tax perks for the construction of the airport within the first 10 years. The company would then enjoy tax privileges worth P2 billion in every succeeding year of the remaining 40 years.
The provision on the tax privileges, which critics claim were extended only to SMC Aerocity, had earlier been slammed by the Action for Economic Reform and other advocacy groups as against government regulations and detrimental to the promotion of fair trade in the Philippines.
Lacson said that if the proposal for the airport construction is approved, it would render useless the tax exemptions for SMC Aerocity “dahil sa probisyon sa CREATE bill na nagsasabing anumang batas na kontra sa mga regulasyon nito ay kinokonsiderang repealed o walang bisa.”
"What I am worried is kapag ang airport franchise bill is passed into law ahead of CREATE bill, we might be facing a constitutional issue," stressed Lacson.
