President Ferdinand R. Marcos Jr. (File photo from NOEL B. PABALATE / PPA Pool)
MANILA, Philippines — President Ferdinand Marcos Jr. on Monday signed into law the measure that amends the law on corporate income taxes.
The measure titled Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act or Republic Act (RA) No. 12066, seeks to boost the country’s economy.
It revises the National Internal Revenue Code to strengthen the country’s tax incentive policy.
The move is meant to attract investments and improve the regulatory system, which is essential for job creation and productivity growth.
READ: New tax incentives bill up for Marcos signing
The new law gives clarity to value-added tax (VAT) zero-rating on local purchases and VAT exemption on importation of goods and services.
It limits registered business enterprise local tax to 2 percent of gross income to simplify the tax process for businesses.
Moreover, the new law offers a 100 percent additional deduction on power expenses for businesses and corporations, along with a 50 percent additional deduction for reinvestment in the tourism sector.
The new measure is an amendment to RA 11534, or the original CREATE Act, which was created to help enterprises recover from the impact of the pandemic.
In a statement on Sunday, Senate President Francis Escudero said he expects the creation of new jobs domestically with the signing of the legislative piece.
“CREATE MORE seeks to encourage more investors to come to the Philippines by providing a more predictable and sustainable playing field,” he said.
“The bottom line is that it will create a more favorable investment climate that will create more jobs [and] spur progress without harming our revenue base,” he noted.
“What the businessmen are looking for are clear, coherent, consistent rules subject to uniform interpretation and implementation,” the Senate leader added.
Escudero further said under the newly signed law, corporate income tax of local and foreign companies will be reduced to 20 percent from 25 percent, and VAT on essential services will be eliminated.
“The Philippines has among the highest power rates in the region, so this will help us in becoming competitive in bringing in investors,” he also pointed out.