As Congress resumes sessions today, January 18, the Philippine Chamber of Commerce and Industry (PCCI), the largest umbrella of business organizations in the country reiterated its call for the august body to focus on the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE), a key economic measure seen to help the country’s economy bounce back from the slump it is experiencing as a result of COVID-19 and the lockdown on economic activities.
“Congress is in a good position to do this as CREATE is in the last step before being enacted into a legislation,” PCCI President Amb. Benedicto Yujuico said.
CREATE, which has been certified an urgent measure by President Duterte and which government economic managers and various business groups have said will restore market confidence and help businesses affected by the pandemic, only needs to hurdle the bicameral conference committee before its signing into law by the President.
The passage of CREATE will remove the uncertainty on the country’s tax incentives regime, which has been a deterrent to foreign businesses looking for potential investment destinations.
“CREATE will provide the momentum for the country to attract foreign direct investments,” Yujuico emphasized.
PCCI, whose membership base is comprised of 70 percent micro, small and medium enterprises added that instant relief from the immediate reduction of corporate income tax will propel the strong recovery of MSMEs.
Earlier, multisectoral groups, comprising of 51 largest and widely-represented private sector associations, have urged for the immediate enactment of theCREATE 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.