CREATE bill seeks to cut corporate income tax by 2027

The proposed Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) aims to reform the Philippines' tax system to make it more competitive and ensure incentives are performance-based, time-bound, targeted, and transparent.

Finance Secretary Carlos Dominguez III stated that CREATE will only grant incentives to industries with significant economic impact.

If approved before Congress adjourns on June 3, the CREATE bill will reduce the corporate income tax (CIT) from 30 percent to 25 percent immediately, with further annual reductions until it reaches 20 percent by 2027.

The bill also proposes extending the sunset period for existing incentive beneficiaries and allows the President to grant non-tax incentives.

Philippine Chamber of Commerce and Industry (PCCI) president Benedicto Yujuico and other business groups urged lawmakers to immediately enact the bill into law, as delaying its passage will hinder economic recovery and prolong hardship.

Trade Secretary Ramon Lopez stated that the Department of Trade and Industry fully supports the CREATE bill, as it is needed by businesses grappling with disruptions caused by the Covid-19 pandemic.

The enactment of the CREATE bill into law is projected to save approximately 120,000 jobs and create around 62,000 new jobs this year, and is vital for attracting crucial investments.