MANILA – The Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill, formerly the Corporate Income Tax and Incentives Reform Act or CITIRA, has gained support from business groups.
In separate statements on Monday, the Philippine Chamber of Commerce and Industry (PCCI) and the Makati Business Club (MBC) lauded the immediate reduction of corporate income tax (CIT) to 25 percent from the current 30 percent.
“Bringing the country closer to the Asean average of 23 percent will help draw in multinational firms seeking alternative sourcing markets and manufacturing base(s),” PCCI president Benedicto Yujuico said.
PCCI also welcomed the extension of net operating loss carryover (Nolco) from three years to five years for losses that enterprises incurred this year.
“In view that the community quarantines have resulted in substantial losses across all industries and sectors, we request that the extension be extended to all firms, regardless of size to protect current employment,” the country’s business group added.
On the other hand, MBC said it supports the uniform menu of incentives under the CREATE bill.
“However, in light of the Covid-19 (coronavirus disease 2019) situation, including the improved incentives other countries are quickly offering, we urge the DOF (Department of Finance) and [the] Congress to add five years to the sunset provisions in CITIRA for existing investors, and offer new investors at least 10 years,” MBC said.
Under the CREATE bill, the government will give a transitory period of four years for companies enjoying the 5 percent gross income earned (GIE) for more than 10 years, sunset period of five years for firms enjoying the 5 percent GIE for five to 10 years, seven years transition for firms enjoying the GIE below five years, and nine years for 100 percent exporters with at least 10,000 employment and footloose projects or activities.
Both business groups urged the Senate and the House of Representatives to immediately pass the CREATE bill.
“The damage Covid-19 and the corresponding lockdown imposed to mitigate its spread has seriously damaged the economy. The business sector needs the package of reforms introduced under CREATE to help businesses recover, ensure their resilience, and create more sustainable economic opportunities,” PCCI said.
The MBC urged the Congress to quickly deliberate on and “subject to the final wording, pass a CREATE bill to end two years of uncertainty for investors, which is all the more important now.” (PNA)
