MANILA – The Department of Finance (DOF) on Wednesday expressed support to the proposed amendments to the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
“The proposed amendments to the CREATE Act will enhance the incentives, clarify the rules and policies on the grant and administration of incentives to qualified enterprises, and address issues affecting the country’s investment climate,” Finance Secretary Benjamin Diokno said in a statement.
The CREATE to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill earlier filed by Albay Rep. Jose Ma. Clemente Salceda seeks to establish a streamlined tax refund system for registered business enterprises (RBEs).
It also covers the institutionalization of risk-based classification of claims and audit framework.
The proposed amendment aims to improve the timeliness, efficiency, and predictability of the value added tax or VAT refund process.
The proposed bill also aims to expand and enhance the deduction regime.
It also seeks to increase the deduction for power expenses from 150 percent to 200 percent, and 200 percent deduction on expenses relating to approved trade fairs, exhibitions, and missions.
The bill also proposes to clarify the transitory provision by exempting transitory RBEs under the 5 percent gross income earned (GIE) regime from all national and local taxes, including VAT and duty incentives.
The CREATE Act establishes a performance-based, time-bound, targeted, and transparent tax incentives regime in the country.
Pursuant to the law, the Cabinet-level Fiscal Incentives Review Board (FIRB) is mandated to oversee the grant and administration of incentives of investment promotion agencies (IPAs).
The DOF said as of end-August this year, the FIRB approved a total of 45 big-ticket tax incentive applications from various RBEs, with a total investment capital of PHP721.29 billion.
The FIRB implements an evaluation and impact analysis system before granting such incentives to RBEs to ensure that the fiscal support that the government grants to private enterprises leads to greater benefits to the people and the economy by new employment generation, innovation, capital infusion, and adoption of advanced technology.
The approved investment projects are expected to create 31,421 job opportunities, primarily in capital-intensive industries such as information and telecommunications infrastructure, transportation, manufacturing, and real estate projects.
Meanwhile, as of July this year, the various IPAs approved a total of 752 projects, with an investment capital of PHP175.67 billion and 49,170 committed jobs.
In total, 797 projects have already been approved under the CREATE Act, resulting in a total investment capital of PHP896.95 billion and 80,591 committed jobs. (PNA)