The proposed Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law aiming to reduce income tax rate to attract foreign investments is up for President Rodrigo Duterte’s signature.
Both houses of Congress on Wednesday have ratified the bicameral conference committee report on the bill. Once passed into a law, the 30-percent corporate income tax of small businesses will be cut down to 20 percent. This is expected to boost economic recovery from the impact of the COVID-19 pandemic.
Among the provisions of the bill is the VAT exemption on medicines for cancer, tuberculosis, kidney disease, among others. The importation of medicines against COVID-19 and personal protective equipment PPEs) will also be VAT-free until 2023.
However, ACT Teachers Party-list Rep. France Castro claimed that only big corporations will benefit from it. The needs of MSMEs and entrepreneurs are not addressed by CREATE.
“Mga apektadong Pinoy (Affected Filipino) entrepreneurs ay nanawagan ng (are calling for) zero-interest or collateral-free loans, business subsidies at (and) tax relief na dapat ay direktang ayuda, at tax breaks maliban sa credit access (which should be direct aid, and tax breaks aside from credit access),” Castro stated.
Senator Pia Cayetano described the law as “a game changer” for all businesses. The country will be at the same pace with neighboring countries in terms of foreign direct investments.
In a separate statement, House Speaker Rep. Lord Allan Velasco said CREATE’s approval and efforts amending restrictive economic provisions of the 1987 Constitution can hasten economic recovery, “attract more local and foreign investors and create jobs for the Filipino people.” – Report from Daniel Manalastas
