DOF confirms Create Act passed on third and final reading

MANILA, Philippines – Finance Assistant Secretary Antonio Lambino confirmed on Tuesday that the Corporate Recovery and Tax Incentives for Enterprises (Create) Act has been passed on third and final reading in the House of Representatives.

Lambino said the act will decrease the corporate income tax of companies from 30%, which is the highest in the ASEAN region, to 25% to bring it closer to the regional average.

The act will also lengthen the duration of usage of the Net Operating Loss Carry-Over (NOLCO) from three years to five years to lessen the tax liability of companies for years to come.

Lambino added that the Create Act also aims to attract investors that would bring more job opportunities to Filipinos and improve the research and technology capabilities of the country.

“Kailangan po natin gawin diyan, i-advance, i-modernize yung ating tax incentive system. Gusto po natin ang flexibility para po mas maka-attract tayo ng mga investors dahil sa ngayon, mukhang nag-diversify po ang maraming global companies,” he said.

(We need to do that, to advance, modernize our tax incentive system. We want flexibility so we can attract investors because, at the moment, it seems that many global companies have diversified. )

Asec. Lambino also said global companies are realizing that relying on one location or country for their whole supply chain is a risky arrangement so they are more likely to diversify. This will be an opportunity for the Philippines to attract investors.

“We really need to start competing with our neighbors on an even playing field,” he said.

He also said the country needs to be competitive at this time and must impose less tax liabilities on private corporations, whether they are micro, small, medium or large enterprises.

“Mas marami pong pera ang iwan natin sa kamay ng mga negosyo para po makaretain sila ng mga mangagawa at makaexpand sila ng operations, mabayaran po nila ang kanilang gastusin every month,” the assistant secretary added.

(We should leave more money in the hands of businesses so they can retain workers and expand business operations, and pay their expenses every month.)

Lambino said that should the Create Act be implemented by July, P42 billion will be given to businesses to help them with their recovery. This is expected to eventually grow to P625 billion in the next five years.