Bataan Freeport warns against removal of incentives at Senate budget hearing

THE Authority of the Freeport Area of Bataan (AFAB) said in its budget hearing that without “superior incentives,” it will have a hard time attracting investors.
In its budget proposal to the Senate on Tuesday, AFAB Chairman and Administrator Emmanuel D. Pineda said, “Without these superior incentives for Bataan, nobody would dare go to the end of the line from NLEX.”
He added that the success of the freeport area, which was established through the Freeport Area of Bataan (FAB) Act (RA 9728) in 2009, was due to incentives.
“Because of the incentives handed to us, we were able to attract locators,” he said.
AFAB’s proposed budget for 2019 covers the construction of at least two factory buildings.
“We expect expansion especially from the manufacturers of luxury bags in light of the tariff and trade war between China and US. We are capitalizing on the opportunity that many investors want to relocate from China to Bataan.”
He said that if the second package of the tax reform for acceleration and inclusion (TRAIN 2) measure is implemented or if the Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) bill is enacted, investors may opt move operations to Cambodia or Vietnam.
“They presented some simulations based on the historical taxes that they paid. Once the provisions of TRAIN 2 and even the TRABAHO bill becomes enacted, they’re projecting a 115% increase in taxation,” Mr. Pineda said.
“With TRAIN 2, they will be opting to go to other countries, particularly Cambodia and Vietnam,” he added.
TRAIN 2 is part of the five tax reform packages of the government which aims to rationalize tax incentives for businesses, and lowers corporate income taxes.
The TRABAHO Bill targets to lower corporate income taxes to 20% from 30% while also rationalizing corporate fiscal incentives. The bill is currently being discussed in the House of Representatives.
The proposed 2019 budget of AFAB is P502 million. Senator Jose Victor G. Ejercito, who chaired the finance committee handling the hearing, endorsed the AFAB’s budget proposal for plenary discussion. — Gillian M. Cortez