House Speaker Martin Romualdez (Speaker’s office)

President Marcos' enactment of the measure amending the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act is expected to boost investor confidence and generate more jobs for Filipinos.

Thus, said House Speaker Martin Romualdez, who witnessed Marcos' signing of the CREATE MORE (Maximize Opportunities for Reinvigorating the Economy) law on Monday morning Nov. 11 in Malacañang.

The new law amends 25 sections and adds four new provisions to the National Internal Revenue Code.

Romualdez, one of the principal authors of the new law, said the CREATE MORE Act seeks to resolve confusion and ambiguities that have arisen on tax incentives the CREATE law had granted to local and domestic corporations since its enactment in March 2021.

He said the principal feature of the original law was the reduction of corporate income tax from 25 percent to 20 percent in line with global trends.

However, he says that even if the law is just three years old, there have been complaints from a number of investors on the alleged ambiguity of some provisions, particularly those on value-added-tax incentives.

“To resolve these issues, and to encourage these investors to remain in the country and keep their workers employed, we found it necessary to already amend the law,” bared Romualdez.

The leader of the 300-plus-strong House of Representatives stressed that the changes also aim to attract more foreign investors.

“We acted fast to make adjustments in the law to preserve existing investments and to attract additional capital,” the Speaker and Leyte 1st district congressman said.

He pointed out that the CREATE MORE Law incorporates inputs gathered during the recent investment missions of President Marcos abroad “by adding tax income deductions and streamlining VAT (value-added tax)-related procedures".

He noted that the President’s foreign trips were expected to generate more than P1 trillion worth of investments.

No reversal of gains

The House leader said the changes introduced in the CREATE law do not reverse gains from the reduction of corporate income tax and the grant of other tax incentives.

He said one complaint raised by investors was about certain discrepancies in the original law and its implementing rules and regulations (IRRs).

He said VAT incentives meant for registered business enterprises, including economic zone locators, exporters, and local businesses classified as “preferred industries", were granted in the IRRs only to registered export enterprises.

The CREATE MORE Act clears up confusion on this provision and resolves similar other issues in the implementation of the original legislation, he added.

“We hope the changes will satisfy our existing investors and entice more foreign capitalists to invest in the country. The enactment of the new law signals our unwavering commitment to keep and attract investments that will preserve jobs and create more opportunities for our people,” Romualdez emphasized. 

Albay 2nd district Rep. Joey Salceda (Facebook)

How many new jobs?

Another author of CREATE MORE, Albay 2nd district Rep. Joey Salceda, said the measure "will directly create at least 142,000 high quality jobs in first three years, and indirectly induce the creation of some 860,000 indirect  jobs."

"It increases the demand for labor, by encouraging more investments. This is the only way to truly sustain higher wages," noted the chairman of the House Committee on Ways and Means.

The economist solon said the new law also addresses the longstanding issue of high power cost for investors by establishing the double deduction for power expenses for those under the enhanced deduction regime. 

"This lifts the largest roadblock to foreign direct investments in the country. By encouraging investments from outside, we increase the bargaining power of the Filipino worker, who are currently in the chokehold of a few domestic players who get to set wages," Salceda said.

"Foreign investors, especially export industries, also tend to pay a significantly higher wage, as much as 47 percent higher than the average employee elsewhere," he noted.

CREATE MORE also enshrines the right to work from home in the export service sector, especially the business process outsourcing (BPO) sector. 

"Companies who have work from home schemes will continue to be eligible for tax incentives," said Salceda, who thanked Marcos for signing the measure.

"If you think deeply about it, CREATE MORE is the largest pro-labor legislation in recent memory," reckoned the Bicolano.