MANILA, Philippines — A bill that would amend the country’s tax code to provide tax incentives and clarify uncertainties in Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) has been ratified by the House of Representatives.
During the plenary session on Tuesday, the bicameral conference committee report on the disagreeing provisions of Senate Bill No. 2762 and House Bill No. 9794, or the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE), was ratified after no one objected to the motion.
READ: Pass CREATE MORE bill to level playing field for businesses, says group
Assistant Majority Leader and Nueva Ecija Rep. Mikaela Suansing introduced the bicameral conference committee report on the floor, moving to approve the final version of the bill.
It was approved by Deputy Speaker Yasser Alonto Balindong after via viva voce or voice voting.
In a statement, Albay Rep. Joey Salceda said the CREATE MORE will address ambiguities in the current CREATE Law—which he said has led to misinterpretations and eventually made the country’s value-added tax (VAT) regime complicated.
“That is why any ambiguity in the CREATE Law that has led to misinterpretations either in the IRR or in the application of the law must be resolved. The VAT regime must be simple, clear, and transaction-based. The incentives regime under the CREATE transition period must be without any ambiguity. And the VAT refund system must work,” Salceda said.
“Our tax incentive approval mechanism must also be agile–while maintaining the government’s oversight of the process. That is why the power to grant incentives is being reverted to the Investment Promotion Agencies (IPAs) but the FIRB’s policymaking and oversight functions are being maintained,” he added.
Salceda said the final version of the CREATE MORE will also bode well for the manufacturing sector, as VAT issues will be solved and proper taxation will be adopted.
“It’s also a big win for manufacturing. We solve their VAT issues, which cost some 120,000 jobs over the past 3 years. We also address the country’s high power cost with the additional or enhanced deduction on power cost, basically making power cheaper by around 3 pesos per kwh for manufacturing,” he said.
“The global environment has also changed rapidly since the enactment of CREATE, particularly in three key areas: the rapid decline of China as the global manufacturing hub, the introduction of the global minimum corporate tax, and the increase in global commodity prices, particularly fuel, due to ongoing world conflicts. In this regard, we cannot afford to bungle our tax treatment of investors,” he added.
If this is enacted into law, Salceda said the 20 percent rate for eligible corporations will also now apply to all registered business enterprises (RBEs) that are under the Enhanced Deductions Regime.