(UPDATE) SENATE President Francis Escudero expects the creation of new jobs under the proposed Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (Create More) Act, which President Ferdinand Marcos Jr. is set to sign into law today.
He said that the proposed law would provide a more “consistent” tax incentives regime that would be attractive to local and foreign investors.
The senator on Sunday said the Create More measure was a priority legislation of the Marcos Jr. administration “meant to spur economic growth in the country.”
President Ferdinand Marcos Jr. PHOTO BY MIKE ALQUINTO
It will amend Republic Act 11534 or the original Create Act that was crafted to help enterprises recover from the impact of the pandemic by lowering the corporate income tax rates and making the country more appealing to businesses by rationalizing fiscal incentives.
“Create More seeks to encourage more investors to come to the Philippines by providing a more predictable and sustainable playing field,” Escudero said in a statement.
The new law will simplify and streamline the value-added tax provisions of RA 11534, particularly on the processing of value-added tax (VAT) refund claims and the VAT zero-rating on local purchases.
“The bottom line is that it will create a more favorable investment climate that will create more jobs, spur progress without harming our revenue base,” Escudero said.
“What the investors need is clear, coherent, consistent rules subject to uniform interpretation and implementation,” he added.
He said the proposed law would “also result in the creation of more jobs and the transfer of technology and know-how that will empower our workers and uplift their lives in the long term.”
“Hopefully, we’ll also be able to provide needed jobs here in the Philippines and give Filipino workers an option to work here instead of simply exploring options to work abroad,” Escudero said.
The corporate income tax rate of local and foreign companies, he said, will be reduced to 20 percent from 25 percent under the enhanced deductions regime as Create More increases the deductions in power expenses of registered business enterprises (RBEs) to 200 percent.
“The Philippines has among the highest power rates in the region so this will help us in becoming competitive in bringing in investors,” Escudero said.
Essential services such as janitorial, security, financial consultancy, marketing and human resources are exempted from the VAT, he said.
Escudero said RBEs would also be allowed to implement work-from-home arrangements for up to 50 percent of their employees.
“In effect, local businesses will benefit just as much as the foreign investors with the clarity on tax and other incentives and the expected uptick in economic activity,” he said.
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