MANILA – The National Economic and Development Authority (NEDA) has lauded the passage of Senate Bill 1357, or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, on second and third reading Thursday.
“CREATE will help small and medium enterprises become more competitive and productive to support the recovery of our economy,” acting Socioeconomic Planning Secretary Karl Kendrick Chua said in a statement Friday.
Once signed into law, the CREATE Act will contribute to the government’s economic recovery program, which includes Bayanihan 1 and 2 and the Financial Institutions Strategic Transfer (FIST) Act.
CREATE seeks to help businesses recover from the impact of the coronavirus disease 2019 (Covid-19).
It will benefit micro, small, and medium enterprises (MSMEs) that comprise 99 percent of enterprises and employ more than 60 percent of Filipino workers.
“We thank the Senate, through the leadership of Senate President Vicente Sotto III, Majority Floor Leader Juan Miguel Zubiri, and Ways and Means Chairperson Pia Cayetano, for shepherding (the) passage of this landmark reform,” Chua said.
The Senate version of CREATE provides an outright 10-percentage point cut in the country’s corporate income tax (CIT) rate, reducing it from 30 percent to 20 percent for domestic businesses with net taxable income equivalent to PHP5 million and below, and with total assets (excluding land) not exceeding PHP100 million.
Other corporations would benefit from a lower CIT rate of 25 percent, down from 30 percent.
The measure also modernizes fiscal incentives by making them performance-based, targeted, time-bound, and transparent.
“With CREATE, the country will also be able to attract more foreign direct investment with an improved incentives menu, which will maximize desirable economic outcomes, such as job creation, domestic value-added, and technology transfer,” Chua added. (PR)
