The proposed Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) will help attract more foreign direct investments (FDI) into the Philippines and enhance the country’s economic growth, Sen. Sherwin Gatchalian said.
Gatchalian, principal author and sponsor of Senate Bill No. 2762 made the pronouncement after the Senate after the bills was approved on third and final reading earlier this week.
“With the expected enactment of the measure, CREATE MORE is anticipated to draw in more foreign direct investments, creating a ripple effect that includes job generation, improved living standards, lower prices for goods and services, and enhanced infrastructures,” said Gatchalian, the bill’s principal author and sponsor.
“To achieve this, the measure focuses on enhancing the tax incentives regime for registered business enterprises, clarifying existing rules and policies on the grant and administration of fiscal incentives, and fostering an investment climate favorable for FDIs,” he explained.
Once enacted, CREATE MORE will provide much-needed clarity regarding the Value Added Tax (VAT) zero-rating on local purchases and VAT exemption on the importation of goods and services.
The bill exempts goods and services linked to the registered project or activity, including essential services like janitorial, security, financial, consultancy, marketing, and even administrative functions such as human resources, legal, and accounting services from VAT.
The bill also introduces not more than two percent Registered Business Enterprise Local Tax (RBELT) based on gross income to simplify the tax process for businesses.
“Sa halip na magbayad ng iba't ibang buwis sa bawat lokal na pamahalaan, ngayon ay iisang buwis na lang ang babayaran ng mga negosyo (Instead of paying different kinds of taxes in every local government, now they will just have to pay one tax for their business),” he explained.
Senate Bill No. 2762 also provides for a 100 percent additional deduction on power expenses of businesses and corporations.
The measure also seeks to grant a 50 percent additional deduction for reinvestment in the tourism industry.
“CREATE MORE offers enhanced and targeted incentives to further drive investment and economic recovery in the country,” the chairman of the Senate Committee on Ways and Means also said.