Metro Manila (CNN Philippines, October 25) — Finance Secretary Benjamin Diokno is backing the proposed amendments to the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act as this would bolster the Philippines’ position as an investment destination.
“The proposed amendments to the CREATE Act will enhance the incentives, clarify the rules and policies on the grant and administration of incentives to qualified enterprises, and address issues affecting the country’s investment climate,” he said in a statement on Wednesday.
Late in July, President Ferdinand Marcos Jr. expressed openness to introducing amendments to the CREATE law following concerns raised by some investors.
According to Diokno, some of the major planned changes to the law, under the CREATE to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill, would cover the establishment of a streamlined tax refund system for registered business enterprises (RBEs) and institutionalization of risk-based classification of claims and audit framework.
Diokno said this would speed up the processing of value-added tax (VAT) rebates for companies.
The CREATE MORE bill likewise seeks to expand the enhanced deduction regime, hiking the deduction for power expenses as well as spending linked to approved trade fairs, exhibitions, and missions.
The measure also targets exempting RBEs under the 5% gross income earned “from all national and local taxes, including VAT and duty incentives.”
Latest data from the Department of Finance showed that the Fiscal Incentives Review Board (FIRB) already green-lit 45 big-ticket tax incentive applications from RBEs, with the investment capital amounting to ₱721.29 billion.
More than 31,000 jobs are expected to be generated from the projects in the information and telecommunications infrastructure, transportation, manufacturing, and real estate projects sectors.
In 2021, former President Rodrigo Duterte signed the CREATE bill into law, designed to cut corporate income taxes, especially for businesses hit by the COVID-19 pandemic. The law also enhances fiscal incentives to entice more investments in the country.
