Finance Secretary Ralph Recto is pushing for amendments to the CREATE Act, also known as the Corporate Recovery and Tax Incentives for Enterprises Law, aimed at attracting investments to the country.
The CREATE Law was enacted to offer relief to local and foreign companies in response to the economic impact of the Covid-19 pandemic.
Among its provisions, the CREATE Law has already reduced the corporate income tax rate to 25% from 30% for domestic corporations as well as for both resident and nonresident foreign corporations.
“We anticipate this to be a transformative measure to enhance the business climate in the Philippines, attract investments, and generate more high-quality jobs for our people,” Recto stated during a meeting with the Manila Overseas Press Club on March 20.
One of the proposed changes is the reduction of the income tax rate to 20% for domestic and resident foreign corporations. Additionally, the proposal includes the establishment of an expedited process for value-added tax refunds with minimal documentary requirements, faster processing times for low-risk claims, and the implementation of a streamlined tax refund system for registered business enterprises.
According to Recto, the strategy is to implement reforms that will stimulate investments and expand the economy.
“We will enhance investments by reducing the cost of doing business, improving the regulatory framework, and eliminating constraints,” he said.
Replacing bureaucratic hurdles with a welcoming environment should encourage investments that will foster growth. The enactment of the Ease of Paying Taxes Act and amendments to the Public-Private Partnership Code are among the measures undertaken by the administration of President Bongbong Marcos Jr. to attract investments.
The ultimate objective, Recto emphasized, is to lift 14 million Filipinos out of poverty, thereby reducing the poverty incidence to single-digit levels or to 8-9% by 2028.
“We are determined not to fall short of achieving this critical goal. This is the key indicator that our economic growth has translated into tangible improvements in the lives of ordinary Filipinos through increased employment opportunities, improved education levels, and better health outcomes,” Recto pointed out.
