Gordon refiles vetoed bill creating Central Luzon investment hub

gordon refiles vetoed bill creating central luzon investment hub - Gordon refiles vetoed bill creating Central Luzon investment hub

A MEASURE creating an investment and infrastructure hub in Central Luzon has been refiled in the Senate after similar legislation was vetoed in the last Congress.

Senator Richard J. Gordon refiled a bill creating the so-called Regional Investment and Infrastructure Coordinating Hub (RICH) of Central Luzon as Senate Bill No. 1549, which also positioned it as a measure in response to the coronavirus pandemic.

“The government urgently needs a clear and concrete strategy and road map for decongestion and decentralization of development away from NCR (National Capital Region),” Mr. Gordon said in the bill’s explanatory note.

Mr. Gordon had sponsored a similar bill in the 17th Congress as chairman of the committee on government corporations and public enterprises.

The measure, however, was vetoed by President Rodrigo R. Duterte, who cited “substantial fiscal risks” due to its proposed incentives running as long as 50 years.

The refiled bill will provide incentives to enterprises that will register with the regional hub, such as a 100% income tax holiday for the first 10 years for entities that construct affordable housing with recreational facilities or a school.

After the 10-year period, the entity will be entitled to a 5% special tax on gross income in lieu of all national and local taxes.

RICH-registered entities may also avail of tax and duty-free imports of raw materials and capital equipment; export tax exemptions; and value-added tax zero-rating of local purchases, among others.

Entities constructing new or renovating existing infrastructure will be entitled to a tax credit worth 30% of the expenses, not to exceed P3 billion.

Projects deemed eligible for the tax credit must be at least 50% located within Central Luzon.

The bill maintains the provision granting 50 years of incentives, subject to extension by a further 50 years at maximum. — Charmaine A. Tadalan

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