Senate President Chiz Escudero expects the creation of new jobs in the Philippines with the passage of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act, which will encourage more investors to the country.
The CREATE MORE Act amends the original CREATE Act (Republic Act No. 11534), which was crafted to help businesses recover from the COVID-19 pandemic by lowering corporate income taxes and rationalizing fiscal incentives.
“CREATE MORE seeks to encourage more investors to come to the Philippines by providing a more predictable and sustainable playing field,” said Escudero.
The new law will simplify and streamline the value added tax (VAT) provisions of RA 11534, particularly on the processing of VAT refund claims and the VAT zero-rating on local purchases.
Escudero noted that previous discrepancies on the rules had caused confusion but expects the new law to help attract more foreign investment, which has struggled to return to pre-pandemic levels.
“The bottomline is that it will create a more favorable investment climate that will create more jobs, spur progress without harming our revenue base. Ang hanap lang naman ng mga negosyante ay clear, coherent, consistent rules subject to uniform interpretation and implementation,” the Senate leader explained.
Under the new law, the corporate income tax rate of local and foreign companies will be reduced from 25 percent to 20 percent. It also increases tax deductions for registered business enterprises, particularly for power expenses, which will be raised 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,” said Escudero.
The CREATE MORE Act also exempts essential services, such as janitorial, security, and human resources, from VAT, and allows RBEs to implement work-from-home arrangements for up to 50 percent of their employees.
The senator from Sorsogon believes that both local businesses and foreign investors will benefit from the clarity the new law provides, leading to more economic activity and job creation.
“This is in line with our commitment for the Senate to make life easier for our people and for those who choose to do business with our people. This will 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.”IMT
