Multisectoral groups, comprising of 51 largest and widely-represented private sector associations, have urged for the immediate enactment of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill to boost market confidence, save jobs and provide instant relief to businesses’ suffering from the COVID-19 impact.
“We, members of some of the largest and most widely-represented private sector groups in the country, reiterate our strongest and unequivocal support for the immediate enactment of the CREATE Bill,” stated the joint statement.
Congress has been deliberating the CREATE Bill for three years already, but both Houses have a hard time reconciling their versions.
“After three years of deliberation, every day of delay comes at the risk of losing more jobs and hemorrhaging more investments,” the groups said.
Calling the CREATE bill “a historic economic reform, one of the largest in decades,” the groups said that “CREATE will be a boost to market confidence, providing instant relief to businesses suffering from business reverses due to the COVID-19 pandemic.”
In particular, the groups supported the bill’s provision for the immediate reduction of corporate income tax (CIT) rate from 30 to 20 percent for small and medium enterprises earning net taxable income not exceeding 5 million pesos, and from 30 to 25 percent for all other corporations, effective July 1, 2020. These would instantly bring the country’s CIT rate closer to the ASEAN average of 21.65 percent and give businesses more resources to retain employees and to keep up with financial difficulties. As an investment-attracting move, the CIT cut also alters the financial prospectus of the Philippines for the better.
The groups also said that the proposed provision to give flexible authority to the Fiscal Incentives Review Board (FIRB) and the President in granting both fiscal and non-fiscal incentives will make the tax incentives system an agile mechanism that can seize high-value investment opportunities.
“We thank Congress for including proper safeguards against abuse of discretion or making it a political tool to grant favors to undeserving recipients,” it added.
They also support the transition period of 10 years for current holders of incentives to ease some concerns about the tax regime change.
“We humbly request the Senate and the House of Representatives to move quickly and decisively to push CREATE forward and ensure its immediate enactment,” the statement concluded.
Signatories to the Joint Statement of Support are ACI Philippines, ANVIL Business Club, Ateneo Law Alumni Association Inc., Bankers Association of the Philippines, Cebu Business Club, Cebu Leads Foundation, Chamber of Thrift Banks, Chinese Filipino Business Club Inc., CIBI Foundation Inc., Federation of Filipino-Chinese Chambers of Commerce & Industry Inc., Federation of Indian Chambers of Commerce Philippines Inc., Financial Executives of the Foundation Inc., Financial Executives Institute of the Philippines, Fintech Philippines Association, Fintech Alliance Philippines, Foundation for Economic Freedom, French Chamber of Commerce and Industry in the Philippines, Fund Managers Association of the Philippines, Guild of Real Estate Professionals, Hotel and Restaurant Association of the Philippines, Institute for Solidarity in Asia, Inc., Institute of Corporate Directors, Integrated Bar of the Philippines, Intellectual Property Association of the Philippines, Investment House Association of the Philippines, IT & Business Process Association of the Philippines, Licensing Executives Society Philippines, Makati Business Club, Management Association of the Philippines, National Real Estate Association Inc., Nordic Chamber of Commerce of the Philippines Inc., Organization of Socialized Housing Developers of the Philippines, Philippine Association of Securities Brokers and Dealers Inc., Philippine Bar Association, Philippine Center for Entrepreneurship, Philippine Council of Associations and Association Executives, Philippine Franchise Association, Philippine Hotel Owners Association Inc., Philippine Institute of Certified Public Accountants, Philippine Life Insurance Association, Philippine Retailers Association, Philippine Women’s Economic Network, Procurement and Supply Institute of Asia, Rural Bankers’ Association of the Philippines, Shareholders’ Association of the Philippines, Spanish Chamber of Commerce in the Philippines, Subdivision and Housing Developers Association, Tax Management Association of the Philippines, Trust Officers Association of the Philippines, UP School of Economics Alumni Association, and Women’s Business Council Philippines.