MANILA, November 12 ------ President Ferdinand R. Marcos Jr. on Monday signed the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act to promote the Philippines as a prime investment destination.
CREATE MORE Act or Republic Act (RA) 12066, signed by Marcos in a ceremony at Malacañan Palace in Manila, builds on the game-changing economic reforms introduced under the CREATE law by making the country’s tax incentives regime more globally competitive, investment-friendly, predictable and accountable.
Marcos said the signing of RA 12066 signifies his administration’s unwavering commitment to empoweringthe business sector and enhancing their growth prospects. “We cannot emphasize enough the important role of the business sector in shaping this law. Your feedback has been essential in our efforts to craft policies that make our country truly competitive on the global stage,” Marcos said. “As we open new doors of opportunity, we drive businesses to reinvest their capital, build upon the workforce, and initiate a ripple effect that will be felt across generations,” he added.
Marcos said the new law is a reflection of the government’s resolve to foster a climate where businesses will flourish and continue to meaningfully contribute to the Philippine economy. “By establishing clear timelines and deadlines and by limiting compliance requirements to those mandated by law, we are promoting transparency and predictability. And in so doing, we create a more reliable process that instills confidence in investors and in partners alike,” he said. “To our investors and development partners, let this be our pledge: The Bagong Pilipinas (New Philippines) continues to foster an economy where businesses and investments remain at the heart of our progressive development.”
Under the CREATE MORE Act, the maximum duration of tax incentives availment is extended by 10 years to 27 years from 17 years, to attract strategic and high-quality investments. Registered business enterprises (RBEs) under the enhanced deductions regime will benefit from a reduced corporate income tax rate of 20 percent. The new law also grants a 100-percent additional deduction on power expenses to cut the costs for the manufacturing sector. It also further streamlines the value-added tax (VAT) refund process by limiting the documentary requirements and addressing the VAT concerns raised by export-oriented enterprises. RA 12066 also introduces various reforms such as the rationalization and streamlining of incentives-related processes to address investors’ pain points and cultivate an investment-friendly climate.It likewise simplifies local taxation by imposing a local tax on RBEs in lieu of all other local taxes, fees, and charges.
The CREATE MORE law also strengthens the respective mandates of the Fiscal Incentives Review Board (FIRB) and the investment promotion agencies (IPAs). It institutionalizes the adoption of flexible work arrangements as a business model for RBEs operating inside economic zones and freeports, without disruption in the enjoyment of their tax incentives.
Marcos said the Filipino people would benefit from the passage of the CREATE MORE Act through more and better economic opportunities that uplift their lives, such as high-quality jobs. The signing of CREATE MORE law is consistent with the Marcos administration’s 8-point socioeconomic agenda. Lawmakers lauded President Marcos for signing the measure, saying it would stimulate economic growth by attracting foreign direct investments (FDIs).“With more foreign direct investments that CREATE MORE is expected to generate, more Filipinos will have better employment opportunities that will, in turn, redound to stronger domestic consumption, one of the major drivers of the local economy,” Senator Sherwin Gatchalian said in a statement. By promoting the growth of food security-related activities, green ecosystems, health-related activities, and defense-related activities, Gatchalian said CREATE MORE would also bring positive changes to communities, such as lower product prices and increased job opportunities for Filipinos, ultimately enhancing their quality of life and overall well-being.
In a separate statement, Senate President Francis Escudero said CREATE MORE would encourage more investors to come to the Philippines by providing a more predictable and sustainable playing field. “The bottom line 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 (What investors are looking for are) clear, coherent, consistent rules subject to uniform interpretation and implementation,” he said.
Clearing confusion, ambiguities
House of Representatives Speaker Martin Romualdez said revisions to the CREATE MORE law were necessary to address the confusion and ambiguities regarding the tax incentives since the enactment of the CREATE law in 2021. He said several investors have complained about the ambiguity of some provisions, particularly concerning value-added tax incentives. “To resolve these issues, and to encourage these investors to remain in the country and keep their workers employed, we found it necessary to amend the law,” Romualdez said in a news release. He said the CREATE MORE law incorporates recommendations gathered from recent investment missions led by President Marcos.
Romualdez said investors had complained about certain discrepancies between the original law and its implementing rules and regulations (IRRs). He said VAT incentives meant for registered business enterprises, including economic zone locators, exporters, and local businesses classified as “preferred industries,” were granted only to registered export enterprises. The CREATE MORE Act, Romualdez said, clears up confusion on this provision and resolves similar other issues in the implementation of the original legislation. “We hope the changes will satisfy our existing investors and entice more foreign capitalists to invest in the country. The enactment of the new law signals our unwavering commitment to keep and attract investments that will preserve jobs and create more opportunities for our people,” Romualdez said.
Senator Juan Miguel Zubiri, principal author of RA 12066, said the new law is expected to cut the bureaucratic red tape that has hampered the growth of business in the country. "We wanted to straighten out and simplify the process of VAT refunds because this has been an issue for many major locators in the country. They go years and years without seeing the refunds that they are entitled to, and they lose billions in the process," Zubiri said. "The key to boosting our economy and creating more jobs is inviting more investors in. And the key to inviting more investors in? Taking care of the ones who are already here. With the CREATE MORE Act now signed into law, we can look forward to new investors entering the country, and old ones expanding their investments even further,” he added.
Source: pna.gov.ph
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