Foreign businesses and exporters groups yesterday said Republic Act 11534, the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) makes the Philippines more competitive and ends investor uncertainty.
Calling CREATE as one of the most important fiscal bills enacted in the Philippines in the last three decades, the groups said the law strongly complements other programs for the economy to recover and grow faster through these difficult times.
“CREATE helps firms maintain solvency, avoid closing, and preserve and create jobs. As the economy recovers, corporations should have more funds available to maintain employment until revenue grows and to hire more during future growth. Export firms currently receiving fiscal incentives will have much longer transition periods, thus avoiding investor exodus and job losses expected from earlier versions of the legislation,” the groups said in a statement.
Except for a group of foreign- owned service export firms whose corporate income tax (CIT) has been increased from 10 percent to 25 percent, CREATE reduced CIT from 30 percent (50 percent higher than the country’s main competitors in Southeast Asia) to 25 percent for larger corporations and to 20 percent for smaller firms.
The groups said the original government proposal to reduce CIT for all corporations to 20 percent remains a priority for the next Congress and president to consider.
CREATE rationalizes fiscal incentives awarded by 14 investment promotion agencies and establishes a powerful Fiscal Incentives Review Board. Eligibility for fiscal incentives will be determined by the Strategic Investment Priority Plan and the incentives granted will be uniform among the multiple investment agencies for location anywhere in the country.
“The final version of the law should avoid employment losses and result in job creation,” the groups said.
Signatories of the statement include : American Chamber of Commerce of the Philippines Inc.; Australian-New Zealand Chamber of Commerce of the Philippines; Canadian Chamber of Commerce of the Philippines; Confederation of Wearable Exporters of the Philippines; European Chamber of Commerce of the Philippines; IT and Business Process Association of the Philippines; Japanese Chamber of Commerce and Industry of the Philippines Inc.; Korean Chamber of Commerce Philippines Inc.; Philippine Association of Multinational Companies; Regional Headquarters, Inc. Semiconductor and; Electronics Industries in the Philippines Inc. – Irma Isip
