An estimated P33-billion worth of potential investments in the Philippines from major electronics manufacturers and a steel producer are on hold because of the newly-implemented value added tax (VAT) in the CREATE (Corporate Recovery and Tax Incentives for Enterprises) law.
The Philippine Economic Zone Authority (PEZA) Management named these investors as Amkor with an expansion worth P16 billion (approximately US$ 319 million), and Dyson with P6 billion (approximately US$ 119 million). Both electronics firms are PEZA-registered and are among the country’s biggest exporters.
A deal with Chinese-owned Panhua Integrated Steel is also affected. They have been planning to register with PEZA prior to the pandemic. A Swiss firm TE is also considering a huge investment in the country.
The PEZA Board has already passed a resolution to the Bureau of Internal Revenue (BIR) to suspend the implementation of Revenue Regulation 9-2021 that enforces a 12% VAT on local purchases and indirect exports of PEZA-registered enterprises.
The agency is also expected to meet these companies to discuss their plans and expectations from the government. They are also expected to recommend to the Fiscal Incentives Review Board (FIRB) big ticket industries in every Tier under the CREATE Law for incentive purposes.