LEGAZPI CITY — The Albay Provincial Board or ‘Sangguniang Panlalawigan’ (SP) has expressed full support for the passage by Congress of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, saying the bill will “directly benefit Albay,” and various local industries nationwide.
In its Albay SP Resolution No. 549 passed on August 18, it said enacting CREATE will help the province with “longer income tax holidays to enterprises locating in the countryside, and to enterprises relocating from the National Capital Region to places like our province, with Albay likely being among the areas with the longest tax holidays once CREATE is enacted.”
Authored by Senior SP Member Jesus Salceda and co-authored by all the Provincial Board Members, the resolution was forwarded to Senate President Vicente Sotto III, House Speaker Alan Peter Cayetano, and Finance Secretary Carlos Dominguez. The CREATE bill is among the priority measures cited and prioritized by President Duterte in his latest State of the Nation Address (SONA).
The resolution pointed out that “CREATE’s incentives for the use of locally-sourced raw materials (with an additional 50 percent enhanced deduction for domestic input expense) will benefit Albay’s agricultural development initiatives, as well as its exporting small businesses, which use local materials such as abaca for export goods.”
Albay has a burgeoning handicraft industry that utilizes abaca and other locally-sourced raw materials, transforming them into export-quality items including textile and furniture. Its capital, Legazpi City, was tagged as a “next wave” city by the business process outsourcing (BPO) industry. Both are priority sectors under CREATE.
“CREATE will yield across-the-board benefits to all businesses by cutting CIT (tax) immediately by 5 percent this year and by another 5%, in increments of one percent every year from 2023 to 2027,” the resolution noted.
CREATE was first approved as the Corporate Income Tax and Incentives Rationalization Act (CITIRA). It is principally sponsored by Albay 2nd district Rep. Joey Sarte Salceda who chairs the House Committee on Ways and Means Committee.
Salceda crafted the core of CREATE’s tax incentives reform provisions based on his Subsidy Council Act proposal, a bill he filed as a freshman congressman in 1998. He recently said the Lower House will adopt the Senate version of CREATE to resolve the delay in passing the bill and save the country from further economic slump.
He said the unduly prolonged discussions of the measure in the Senate “extend the agony,” of Filipinos but will not enhance it further, considering that multiple consultations were already done with various stakeholders on the proposal.
Apart from lowering the corporate income tax (CIT), CREATE will also allow the government to give “bonus” incentives to what the lawmaker refers to as “elephant-sized investments,” or those investments that are unique in size, job creation, and knowledge transfer potentials.
“With this new feature, we can now aggressively pursue very large investments and compete with our neighbors. The reforms fit very well with Albay’s own development trajectory of opening up to the world, with our international airport’s upcoming opening,” Salceda added.