[ Manilastandardtoday.com ] August 9-10, 2008
The chairman of the House committee on oversight has filed a measure seeking to encourage the private sector to invest in the development of roads and railways under the government’s build- operate-transfer program by giving them tax exemptions.
Rep. Danilo Suarez of Quezon said House Bill 4191 aims to decongest heavily saturated urban areas and trigger development in the rural areas where more roads and railway projects are needed.
“These projects require massive capital outlay, which the government cannot afford at this time, and only the private sector has the means to do this so we must encourage their participation” Suarez said.
Suarez said that despite the various fiscal and non-fiscal incentives granted under Republic Act 7718, also known as the Build-Operate-Transfer Law, it seems the government still has trouble attracting even financially sound multinational companies to underwrite road and railway projects.
“Thus, it should be accepted that government must be willing to do more than just offer the BOT incentives, it must lessen the burden of companies that have shown interest to undertake these projects,” Suarez said.
According to Suarez, among the concerns of the private sector are the local government taxes and real property taxes imposed by local government units pursuant to the Local Government Code of 1991.
He said the immense benefits to be derived from Private Sector Infrastructure and Development Projects could more than compensate for the lost revenues that would otherwise accrue to the LGUs from the collection of local government taxes and real property taxes.
Suarez said the concerns of the private sector appear to be reasonable since there are some LGUs that want to lessen their burden if not fully remove the local government tax and real property tax liabilities of those undertaking projects under the BOT Law. Macon Ramos Araneta
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