Bicam approves CREATE Act
MANILA, Philippines — The bicameral conference committee has approved the reconciled version of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, Albay Rep. Joey Salceda said Monday.
Salceda, who chairs the House committee on ways and means, said the bicameral had settled the disagreeing provisions of House Bill No. 4157 and Senate Bill No. 1357 or the two chambers’ respective versions of CREATE Act, previously called the Corporate Income Tax and Incentives Reform Act (CITIRA) bill.
The measure seeks to reform corporate income taxes and incentives in the country.
“This will be the greatest economic reform of the post-EDSA years, second only to economic amendments to the Constitution. Removing the uncertainty will be like opening the floodgates to investment,” Salceda said in a statement.
“I expect at least P12 trillion pesos in combined domestic and foreign investment over the next decade due to CREATE alone. $90 billion of that will be FDI (foreign direct investment),” Salceda added.
According to Salceda, the measure would result in around 1.8 million jobs over the next ten years.
“Combined with economic amendments to the constitution to maximize impact, we can produce some 8.4 million jobs,” Salceda said.
Further, Salceda said that the approval of CREATE “ends investor uncertainty on the country’s fiscal regime.”
“We are also ending hesitation to invest in the Philippines. Because it took us time to come up with a consensus version, however, we lost $18 billion in foregone FDI from 2018 to 2020. The bleeding stops now,” Salceda said.
Salceda likewise said that while CREATE would result in some P931 billion in tax savings for businesses, this is to frontload relief and cover the economic gap brought about by COVID-19.
“We are frontloading relief now because relief is needed now,” Salceda said.
Moreover, Salceda said that with the CREATE bill, the country is also lowering corporate income tax to bring it closer to the ASEAN region’s average and keep up with other neighboring countries.
“We also introduce several tax relief provisions in this bill for all sizes of businesses, especially small and medium ones. With quick vaccine rollout, the chance is stronger that businesses will devote tax savings to creating new jobs,” Salceda said.
“That is why we have also introduced COVID-19 measures in this bill, including VAT and duty-free importation of vaccines,” he added.