By Brian Campued
To support the administration’s efforts to generate more high-quality jobs and spur economic growth, President Ferdinand R. Marcos Jr. signed into law on Monday the Republic Act No. 12066 or the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Law.
In his speech at the Malacañan Palace, the President reaffirmed his commitment to making the Philippine business environment more inclusive and empowered towards a globally competitive and investment-led Philippine economy.
According to Marcos, the CREATE MORE Act “is a resounding testament of our commitment to make the Philippines the destination of choice for investments” both domestic and global.
“By building on the reforms initiated through the CREATE Act, we have enhanced our tax regime [and] incentive framework, and making it more inviting for investment while remaining steadfast in the principles of fiscal prudence and stability,” 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.
The Chief Executive said RA 12066 is also a product of the “invaluable” insights shared by international partners, gathered during his trips abroad.
“Their feedback has enriched this legislation, a reflection of our resolve to foster a climate where businesses will flourish and continue to meaningfully contribute to the Philippine economy,” he said.
Marcos also highlighted the country’s potential as a “vibrant force” in Asia, as the Philippines’ gross domestic product (GDP) grew at an average of 5.8% during the first three quarters of 2024.
“Despite our potential, we recognize the challenging road that still lies ahead. Through this law, we seek to attract both domestic—and this is an important point—and global investments, focusing on strategic industries that will shape our future,” he stressed.
Salient features of CREATE MORE Law
According to Marcos, RA 12066 amends the National Internal Revenue Code of 1997 and enhances the country’s fiscal incentives framework as guided by five overarching objectives:
- Improving the ease of doing business by streamlining compliance and recognizing emerging work arrangements;
- Clarifying value-added tax (VAT) rules to resolve implementation challenges related to VAT incentives and ensure clearer, more consistent application;
- Increasing the competitiveness of tax incentives to attract more investors and business;
- Strengthening governance and accountability in the grant and administration of tax incentives; and
- Clarifying transitory rules for Registered Business Enterprises (RBEs) to facilitate a smooth transition to the new tax regime
“We restore to our registered business enterprises (RBEs) a vital support they once knew—the eligibility for VAT incentives for costs that are directly attributable to the conduct of their business. This means that essential expenses—those reasonably necessary and incidental to their operations—may once again be enjoyed zero-rated, as they were prior to the CREATE Act,” the President said.
The CREATE MORE Act also clarifies local taxation during the income tax holiday and enhanced deductions regime, creating a fair and balanced system for local taxes and giving businesses greater security.
It also raised investment capital approval threshold for investment promotion agencies from P1 billion to P15 billion, with projects exceeding said amount requiring review by the Fiscal Incentives Review Board.=
The law extends the maximum duration of tax incentives for strategic investments from 17 to 27 years and reduces the corporate income tax rate for registered business enterprises to 20%.
It also provides tax or duty exemption on donations of capital equipment, raw materials, spare parts, or accessories to the government and government-owned and-controlled corporations (GOCCs), Technical Education and Skills Development Authority (TESDA), state universities and colleges, and the Department of Education or accredited schools of the Commission on Higher Education (CHED).
“CREATE MORE is a tangible proof that we hear and respond to the voices of the business community. This reaffirms our commitment to work hand-in-hand with enterprise, continually seeking avenues to make your investments grow and prosper,” the President said.
“To our investors and development partners, let this be our pledge: The Bagong Pilipinas continues to foster an economy where businesses and investments remain at the heart of our progressive development,” he added.
PBBM lauded by lawmakers
House Speaker Martin Romualdez praised the President for signing the new measure, emphasizing that the changes introduced in the CREATE law do not reverse the gains from the reduction of corporate income tax and the grant of other tax incentives.
“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 in a statement.
Finance Secretary Ralph Recto, for his part, said the new law would “open floodgates of more high-impact investments” into the country.
“This will not only attract new investments and grow existing businesses to make more money but also enable us to create more high-quality jobs, increase our people’s income, and reduce poverty. Through CREATE MORE, we will secure a brighter future for every Filipino,” Recto stated.
—av