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 Act to do away with “dead industries” and create new ones that will be resilient to shocks such as the Covid-19 pandemic.
Salceda, House ways and means committee chair and principal author of Republic Act No. 11534 or the CREATE Act, 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 working with the Department of Trade and Industry 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 said.
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 in March, Salceda said he started working with the DTI, particularly the Board of Investments, to craft the SIPP which includes 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 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 would basically be the promo brochure that investment promotion agencies use to invite investors. “This is urgent work. We have to create new jobs now,” he said, adding he wanted 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 said.
Salceda urged 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, as the SIPP is like the storefront sign that says ‘we are open for business.”
The CREATE Act also reduces the corporate income tax rate to 20 percent from 30 percent 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-percent income tax rate.