CREATE Bill Gets Approval from Bicam to be Signed into Law
The Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill has been approved by the Houses of Senate and Congress to be signed into law.
Through a series of bicameral conference committee meetings, the Senate and Congress rectified their conflicting views about the said bill and approved its contents to be ready for signing.
Albay Representative Joey Salceda, Chairman of the Ways and Means Committee of the House of Representatives, confirms that the bill is finished and ready for signing for both panels.
The CREATE bill aims to reform the corporate tax income (CIT) and the fiscal incentives for businesses to support the business sector of the Philippines.
Under the bill, the CIT will be reduced to 25% from the current 30% for enterprises, while micro, small, and medium enterprises (MSMEs) and businesses with capital less than ₱5 million pesos are permitted to enjoy a CIT of 20%.
Salceda mentioned that on the part of the House, the major items the Senate agreed with are shorter incentives for domestic enterprises, stringent controls against illicit trade in economic zones (ecozones), and longer incentives for all areas outside the National Capital Region (NCR).
Salceda added, “Once the revenue estimates are out, I believe we will have saved likely ₱100-120 billion in foregone revenues compared to the initial Senate version.”
Salceda also disclosed that approximately US$18 billion in foreign direct investments were lost over the past three years of uncertainty over the delays of passing the tax reform.
The final version of the CREATE bill will carry both VAT and duty exemptions for the COVID-19 vaccines until 2025 to help expedite the vaccine procurement in the Philippines.
Salceda continued, “Vaccine rollout is the most important economic stimulus measure. We are happy to report that CREATE will also help get it done.”