THE House of Representatives (HOR) on Monday approved on third and final reading the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act.
The development comes days before Congress goes on its Holy Week Break on March 23, 2024.
Albay Second district Rep. Jose “Joey” S. Salceda lauded the progress in the passage of the new legislative measure, which aims to “correct” the Value Added Tax (VAT) regime under CREATE’s Implementing Rules and Regulations (IRR), which resulted in the loss of 125,560 manufacturing jobs.
“Manufacturing is sensitive to increases in cost, being a low-margin operation, so any undue increase in taxes in that sector also means job losses. We need to course-correct on VAT,” Salceda said in a statement issued on Monday.
Other necessary amendments in CREATE include streamlining the procedures of the Fiscal Incentive Review Board (FRIB) so it will not hinder the inflow of Foreign Direct Investments (FDI).
Salceda said the bill also aims to reduce the Corporate Income Tax (CIT) for enhanced deductions (ED) from 25 percent to 20 percent to encourage companies. He said this will encourage companies to shift from the special corporate income tax (SCIT) regime to ED instead.
The lawmaker said the country can also attract more investments through an “enhanced deduction for power cost [that] will be more targeted towards those who need competitive power rates to create jobs.”
He said the proposed bill aims to improve the CREATE Law, which already created some 366,650 additional jobs in the economy.
“CREATE is on track to meet its 10-year job creation target of 1.4 million jobs due to lower corporate income taxes and a harmonized tax incentives regime,” Salceda said.
The ongoing amendments, he pointed out, are timely as more firms shift their manufacturing operations away from China.
“CREATE MORE is our response to these developments. And it pragmatically affirms what works with the CREATE law, while correcting other policies early,” Salceda said.