President Marcos signed on Monday, Nov. 11, the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act, stressing that it's "a decisive step" towards a globally competitive and investment-led Philippine economy.

Marcos said the signing of the Republic Act No. 12066 was a "resounding testament of our commitment to make the Philippines the destination of choice for investments."

"Through this law, we seek to attract both domestic – and this is an important point – both domestic and global investments, focusing on strategic industries that will shape our future," Marcos said in his speech.

"CREATE MORE sets the stage for a business landscape that empowers our enterprises and enhances their growth prospects. By building on the reforms initiated through the CREATE Act, we have enhanced our tax regime [and] incentive framework, and making it more inviting for investment—while remaining steadfast in the principles of fiscal prudence and stability," Marcos added.

The President further said that the law clarifies the rules of availment of VAT and duty incentives, and further extends its coverage to include non-registered exporters and high-value domestic market enterprises.

"We restore to our registered business enterprises (RBEs) a vital support they once knew—the eligibility for VAT incentives for costs that are directly attributable to the conduct of their business. This means that essential expenses—those reasonably necessary and incidental to their operations—may once again be enjoyed zero-rated, as they were prior to the CREATE Act," he said.

The Chief Executive also underscored that the law is a symbol of the invaluable insights shared by international partners, gathered during his trips abroad.

"Their feedback has enriched this legislation, a reflection of our resolve to foster a climate where businesses will flourish and continue to meaningfully contribute to the Philippine economy," he said.

"Our partners in the Diplomatic Corps, this has been something that we have been discussing for a long time and here it is," he told them.

Through the CREATE MORE Act, local taxation during the Income Tax Holiday and Enhanced Deductions Regime—areas previously unaddressed by the original CREATE Act are being clarified.

It creates a fair and balanced system for local taxes, giving businesses greater certainty while ensuring that local communities also benefit from their presence.

"With this law, we are establishing a more efficient approval process by raising the investment capital approval threshold for our Investment Promotion Agencies from 1 billion to 15 billion pesos, ensuring that only projects exceeding this amount will now require review by the Fiscal Incentives Review Board," Marcos said.

CREATE MORE expands the Enhanced Deductions Regime, offering greater tax relief to registered business enterprises.

CREATE MORE benefits

According to the President, key benefits include the reduction in the income tax rate to 20 percent from 25 percent, a doubling of additional deductions on power expenses which will significantly cut costs for the manufacturing sector, and an additional 50 percent deduction for tourism reinvestments and trade fair expenses.

The law also provides tax or duty exemption on donations of capital equipment, raw materials, spare parts, or accessories to the government,  and Government-Owned and Controlled Corportaiona (GOCCs), Technical Education and Skills Development Authority (TESDA), state universities and colleges, and Department of Education (DepEd) or Commission on Education (CHED)-accredited schools as well.

CREATE MORE refines the incentive structure, empowering the Philippines to remain competitive and agile  in the face of emerging global shifts, Marcos said.

It provides flexibility in the grant of fiscal and non-fiscal incentives, offering registered businesses the option to directly avail of the Special Corporate Income Tax Rate or the Enhanced Deductions Regime at the start of commercial operations.

In recognition of emerging work arrangements globally, the legislation also provides registered business enterprises  the flexibility to implement Work-from-home arrangements for up to half of their workforce, all without jeopardizing their eligibility for incentives, Marcos highlighted.

"By doing this, we position the Philippines as a forward-thinking, agile economy—one that is ready to meet the demands of the digital age," he said.

The new law authorizes businesses established before the CREATE Act to continue enjoying their national and local benefits, including VAT and duty incentives, until 2034. They also have until the end of 2024 to register and avail of the incentives under the CREATE Act.