Passage of the proposed Corporate Recovery and Tax Incentives for Enterprises Act bill until the Senate’s session on June 3 would benefit the business sector starting July 1.
Finance Assistant Sec. Antonio Joselito Lambino II said the measure is an updated version of the Corporate Income Tax and Incentives Rationalization Act that has been approved by the House of Representatives and has been certified as an urgent bill.
Lambino said the measures aim to help businesses bounce back from the impact of the coronavirus disease 2019 pandemic immediately, and to encourage foreign investors to locate here and thus, provide additional job opportunities.
Under CREATE, corporate income tax would be reduced by five percentage points from 30 percent to 25 percent immediately, an improvement from CITIRA’s one-percentage-point reduction annually for the next 10 years.
Lambino said CREATE also seeks to authorize the President to give non-tax incentives, such as training of workers for the prospective foreign investors, and extend warehousing, registration and permitting services.
“These are already being extended by other countries and we want to also provide these to make us more competitive and encourage foreign investments,” he said.
The measure also aims to extend the sunset period for those currently enjoying the incentives from two to seven years from CITIRA to four to nine years under CREATE, which the DoF deputy chief said would give the investors additional time to adjust and recover their costs.
“If the measure will be passed before the adjournment in a few days, June 3 is the last session day, and the President would be able to sign it between then and the end of the month, we will be able to bring down corporate income tax rates starting July 1,” he added.