Albay 2nd district Rep. Joey Salceda (Facebook)

Albay 2nd district Rep. Joey Salceda is upbeat over the passage on second reading of the CREATE MORE (Maximize Opportunities for Reinvigorating the Economy) bill, his pet measure.

As such, the House Committee on Ways and Means chairman gave context to the importance of the proposed law, which was given penultimate approval during plenary session Monday, March 11.

The measure aims to make the country's tax regime both compliant with the minimum global tax and at the same time remain competitive.

"CREATE MORE builds on the progress achieved by the CREATE Act and responds to emerging developments in the global economy," Salceda said.

"First, the CREATE (Corporate Recovery and Tax Incentives for Enterprises) Law succeeded in creating some 366,650 additional jobs in the economy as a whole and some 112,464 committed jobs from the P1.1 trillion in approved investments that the tax incentives regime created. That means that CREATE is on track to meet its ten-year job creation target of 1.4 million jobs due to lower corporate income taxes and a harmonized tax incentives regime," he said.

"Second," Salceda said, "CREATE has given the Philippines some level of protection against headwinds in the global investment environment."

"Higher Fed rates, the Covid-19 pandemic, and a slower-growing China has caused global FDI (foreign direct investments) levels to decline even versus pre-pandemic levels, but the Philippines’ FDI performance still exceeds in 2019 levels," he noted.

"Third, the oversight and policymaking powers of the Fiscal Incentives Review Board (FIRB) has allowed us to evaluate tax incentives performance through the annual FIRB report. This helps us craft investment promotion strategies to make the country more competitive against our very ambitious neighbors," explained Salceda.

"Nonetheless, the global environment has also changed rapidly since the enactment of CREATE, particularly in three key areas: the rapid decline of China as the global manufacturing hub, the introduction of the global minimum corporate tax, and the increase in global commodity prices particularly fuel due to ongoing world conflicts."

The economist-solon said this is the reason why the Philippines cannot afford to bungle its tax treatment of investors.

"So, we need a tax regime that is both compliant with the minimum global tax and remains competitive. That is why we are reducing the tax rate for those under enhanced deductions from 25 percent to 20 percent, so that eligible enterprises will shift from SCIT (Special Corporate Income Tax) to enhanced deductions," he further explained.

The CREATE MORE bill is penciled for third and filing reading passage next week before the Holy Week recess.