In this photo taken on July 22, 2018, residential (L) and informal settlers (R) areas are pictured against the backdrop of Philippines’ financial district of Makati. (Picture by TED ALJIBE / AFP)
MANILA, Philippines — Senators on Monday said the newly signed law titled “Create More Act” will help the country attract foreign investors, leading to an increase in job opportunities and economic growth.
Senators made the pronouncement after President Ferdinand Marcos Jr. put his signature into the bill called Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (Create More) Act.
The chief executive signed the measure or the Republic Act. No. 12066 on Monday morning in Malacañang.
READ: Marcos signs CREATE MORE Act amending corporate income taxes law
In a statement, Senator Juan Miguel Zubiri noted how the law will address problems for long-time investors, particularly the protracted process of claiming Value Added Tax (VAT) refunds.
Zubiri said such problems were encountered by existing investors, each of whom had their own VAT refund complaints.
“If existing investors are losing billions here, naturally they would want to leave, and there are many investment options available to them now, especially among our Southeast Asian neighbors,” said Zubiri,.
The senator authored and co-sponsored the measure.
“If they leave, that’s thousands of jobs gone, and we become a no-go for other potential investors,” he added.
Zubiri believes once these problems are addressed, investors will begin to flock to the country, leading to more jobs and a better economy.
“The key to boosting our economy and creating more jobs is inviting more investors in— and the key to inviting more investors in? Taking care of the ones who are already here,” the senator said.
“With the Create More Act now signed into law, we can look forward to new investors entering the country, and old ones expanding their investments even further,” he noted.
Meanwhile, Senator Win Gatchalian shared similar statements, noting that enacting the measure will “create a ripple effect in the country’s economic development.”
“With more foreign direct investments that Create More is expected to generate, more Filipinos will have better employment opportunities that will, in turn, redound to stronger domestic consumption, one of the major drivers of the local economy,” said Gatchalian.
The lawmaker is the principal author and sponsor of the measure.
Gatchalian believes the Create More Act will draw more foreign investors since it clears up the procedures on the application of VAT zero-rating on local purchases, and VAT exemption on the importation of goods and services.
The amendments will apply to goods and services linked to the registered project or activity, including essential services like janitorial, security, financial, consultancy, marketing and administrative functions such as human resources, legal and accounting services.
The Create More Act is an amendment to RA 11534, or the original Create Act, which was enacted to help enterprises recover from the impact of the pandemic.
The law imposes a 20-day timeframe for the Fiscal Incentives Review Board (FIRB) and Investment Promotions Agencies to act on applications for tax incentives.
Under the act, FIRB now also grants an incentive period of 24 to 27 years, up from 12 to 17 years.
Furthermore, the law also ensures that export-oriented enterprises are exempt from paying VAT on domestically purchased materials as well as services that are directly attributable to their production.