The Department of Finance (DOF) has reported that the law providing tax relief for eligible companies has resulted in the creation of over 100,000 jobs for Filipinos since its implementation two years ago.

Data from the DOF showed that total approved investments under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law, also known as Republic Act No. 11534, reached P1.1 trillion from August 2021 to December 2023.

Broken down, the Fiscal Incentives Review Board (FIRB) has green-lit 51 applications, totaling P843.9 billion in investment capital, with an expected creation of 33,278 jobs.

In parallel, the Investment Promotion Agencies (IPAs) have approved 881 applications, representing a total committed investment capital of P207 billion and an expected generation of 69,026 jobs.

“In sum, the CREATE Act has successfully brought in a whooping P1.1 trillion worth of investments and 102,304 expected jobs for the Filipino people,” the DOF said.

Enacted during the Duterte administration, the CREATE law lowered the regular corporate income tax rate from 30 percent to 20 percent for domestic enterprises with a taxable income of P5 million and below, as well as total assets not exceeding P100 million.

For larger corporations with assets surpassing P100 million, the rate was set at 25 percent. Additionally, CREATE introduced an improved incentives package characterized by being performance-based, time-bound, targeted, and transparent.

However, despite these positive developments, there are ongoing efforts in Congress to amend the CREATE law with the aim of making the tax incentives system more adaptable to the global market and enhancing global competitiveness.

Specifically, Congress aims to tackle issues related to the value-added tax (VAT) rate and refunds, particularly for exporters.

Other proposed improvements encompass reducing the corporate income tax to 20 percent for those under the enhanced deduction framework, implementing a 200 percent deduction for power costs that can be accumulated while availing of an income tax holiday, introducing a 200 percent deduction for trade fair and trade mission expenses, and allowing the application of the Net Operating Loss Carryover five years after the end of the ITH period.

The proposal also entails the imposition of a uniform 1.5 percent registered business enterprise local tax to be collected by investment promotion agencies "in lieu of all local impositions," aiming to streamline interactions with local government units.

Furthermore, the proposal includes the provision of a special skills visa for highly technical personnel employed in registered business enterprises.