MANILA -- President Rodrigo R. Duterte has vetoed the bill creating the Central Luzon Regional Investment and Infrastructure Coordinating Hub.
In his veto letter sent to Congress on Wednesday and released to the media on Thursday, Duterte said that while he supports increasing investor confidence, the measure poses "substantial fiscal risks" that prompted him to reject it.
I cannot support the bill considering the provisions therein that tend to defeat these very objectives and policies in the long run. In particular, the bill has several provisions which would pose substantial risks to the country are thus inimical to its economic growth, Duterte told members of both the Senate and the House of Representatives.
The President said taxpayers will bear the consequences in the proposed scheme since they are excluded from tax incentives.
Duterte said the bill significantly narrows the tax base with its mandated incentives applicable to registered enterprises in an entire region.
"This renders the whole system incapable of generating a yield sufficient to sustain the country's social and economic infrastructure, and this would necessitate finding new sources of revenue through additional taxes or borrowings in the future," he said.
Duterte added that the proposed bill would maintain the mandated fiscal incentives for 50 years and can be extended to another 50 years.
"Prolonging such a situation for half a century or more is likely to bring negative revenue and fiscal implications to succeeding administrations and unnecessarily burden future generations," he said.
The President said his administration pushes for a "more fiscally disciplined policy" and a tax system that would alleviate the tax burden of Filipinos.
"We need a tax system that will attract the right kinds of investment that will truly benefit the majority of people throughout the country," he said.
"The goal is to create opportunities for all that empower even the simplest contributor to our economy," he added.
The vetoed measure would have offered tax incentives to investors in the Central Luzon region.
The proposed hub was supposed to replace the existing Subic-Clark Alliance for Development Council.
Source: Philippines News Agency