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Manila Bulletin devider Business devider CREATE incentives drive investments over P720-B

CREATE incentives drive investments over P720-B

Published Aug 30, 2023 07:29 am

At A Glance

  • The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law has generated investment commitments exceeding P720 billion since 2021.<br>CREATE is considered the largest fiscal stimulus for businesses in recent history as it provides tax relief and lowers corporate income tax rates.<br>Incentives are also offered including income tax holidays, special corporate income tax rates, enhanced deductions, duty exemptions, and VAT zero-rating on local purchases.<br>The law prioritizes investments in the digital sector, research and development, and advanced digital technologies.<br>The Strategic Investment Priorities Plan (SIPP) identifies activities eligible for tax incentives under the CREATE Act.

The Department of Finance (DOF) has reported that the implementation of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law has spurred investment worth over P720 billion.

Under the CREATE law, the government has provided tax incentives to major projects amounting to a total committed investment capital of P721.3 billion, Finance Secretary Benjamin E. Diokno said.

“Since the enactment of the CREATE Act, the government has approved and granted incentives to 45 big-ticket projects with a total committed investment capital of P721.3 billion or $13.4 billion,” Diokno said.

He further stated that as a result of CREATE, investment promotion agencies have given their approval to 740 projects, each with a minimum capital commitment of less than P1 billion.

“This amounts to P173.8 billion or $3.3 billion in total investment capital,” Diokno said.

The CREATE law, signed by former President Rodrigo R. Duterte on March 26, 2021, came into effect on April 11 of the same year.

It is considered the largest fiscal stimulus for businesses in recent history, providing private enterprises with over P1 trillion worth of tax relief over the next 10 years, according to the DOF.

Registered companies and projects under CREATE are eligible for incentives such as income tax holidays, special corporate income tax rates, enhanced deductions, duty exemptions on selected material imports, and value-added tax (VAT) zero-rating on local purchases.

“I invite you to take a look at the Strategic Investment Priority Plan (SIPP), which identifies priority industries, projects, and activities that can be granted incentives,” Diokno said.

The SIPP outlines the eligible activities for tax incentives under the CREATE Act.

“Investments in the rural areas and highly-advanced and technology-enabled projects and activities are given high priority and, consequently, higher and longer incentives,” he added.

The finance chief also stressed the importance of prioritizing investments in the digital sector.

Diokno highlighted that incentives are specifically provided to projects involved in research and development, as well as the adoption of advanced digital technologies related to the fourth industrial revolution.

These technologies span various fields, including artificial intelligence, additive manufacturing, data analytics, cloud computing, nanotechnology, and digital infrastructure investments, among others, the official said. (Gabriell Christel Galang)

Related Tags

Corporate Recovery and Tax Incentives for Enterprises Department of Finace CREATE Law Finance Secretary Benjamin E. Diokno
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