Voting 20-1, the Senate on Thursday approved on third and final reading the proposed Corporate Recovery and Tax Incentives Reform Act (CREATE) which seeks to reform the corporate income taxes and incentives.
The measure, Senate Bill No. 1357, was formerly known as the proposed Corporate Income Tax and Incentives Reform Act (CITIRA) before it was reinvented and renamed as CREATE right after the COVID-19 pandemic hit the Philippines.
President Rodrigo Duterte had earlier certified the measure as urgent.
Senator Richard Gordon was the only senator who did not vote in favor of the measure, which provides for a five percent reduction in the country’s corporate income tax rate.
Gordon had opposed the authority that would be given to the Fiscal Incentives Review Board (FIRB) in approving tax incentives for entrepreneurs under the bill.
Senator Pia Cayetano, chair of the Senate Ways and Means Committee, and sponsor of the measure, said that once enacted, corporate income taxes would be lowered gradually from 30 percent to 25 percent and eventually to 20 percent by 2027.
Prior to the approval of the measure, the Senate rejected Gordon’s proposal to exempt the Subic Bay Metropolitan Authority (SBMA) and other freeport zones from the coverage of CREATE.
Senators, however, rejected Gordon’s amendment with Cayetano explaining that the objective of the measure is to ensure that all investment promotion agencies (IPAs) are held accountable by the FIRB and to make their filings and submissions to the Board.
“That’s the basis for the creation of the FIRB, for all the IPAs to be able to work with the FIRB, to provide the data that is needed so that we can do our cost-benefit analysis, so that there can be accountability,” Cayetano said during the plenary debates.