MANILA, Philippines — There will be more flexible incentives in the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill, which was previously called as the Corporate Income Tax and Incentives Reform Act (CITIRA), Albay Rep. Joey Salceda said on Saturday.
“The new CITIRA will now reduce corporate income taxes faster, from 1 percent every year to 5 percent immediately on the first year, and then 1 percent until we reach 20 percent,” Salceda said in a statement. “That frontloads development and expansion, which we need, since the need for economic expansion is very much here and now.”
According to Salceda, the measure will also provide a “net operating loss carryover (NOLCO) benefit that is available to 99 percent of corporate taxpayers,” he added.
“Essentially, non-large taxpayers will be allowed to carry-over period their net losses in 2020 for two more years. That’s very useful for those who were not able to anticipate the size of losses they would incur this year, and it’s also an incentive to survive, basically because you have to keep operating for the whole validity of the NOLCO benefit,” he said.
Salceda said the bill would also include a longer sunset period for activities receiving incentives.
“The sunset period for activities currently receiving incentives is now also extended, from the previous 2 to 5 years, to 4 to 7 years,” he said.
Salceda said they are expecting to approve the Create bill before June ends to allow businesses to benefit from the CIT cut by July this year.
/atm