DOF chief optimistic on approval of CREATE bill by end-2020

FILE: Finance Secretary Carlos Dominguez III explains how the implementation of the Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law can benefit the citizenry and the government during a press briefing at the New Executive Building in Malacañang on January 8, 2018. TOTO LOZANO/Presidential Photo

– Department of Finance (DOF) Secretary Carlos Dominguez III remains optimistic for the approval of the proposed Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill by end-2020.

During a webinar titled “Philippines as Pathway to Asia in Post-Pandemic World” hosted by the Philippine Embassy in Washington DC Friday, Dominguez said the proposed measure is currently being discussed in the Senate.

“We see light at the end of the tunnel and we expect this (CREATE bill) to be done by the end of this year,” he said.

Dominguez said they “have been engaged with the Senate very intensely” in the last two to three weeks to discuss the tax measure, eyed to help enterprises immediately bounce back from the pandemic and, in turn, boost economic recovery.

“Well, this is the furthest this reform measure has come over the last 25 years when it was first proposed,” he said.

President Rodrigo R. Duterte has urged lawmakers for the immediate approval of this tax reform as it is seen as among the key factors that will boost recovery opportunities for the domestic economy.

The CREATE bill aims to lower corporate income tax (CIT) by 5 percent, or from the current 30 percent to 25 percent, once the law takes effect.

This cut is more aggressive compared to the previous proposal to slash it by 1 percentage point annually for the next 10 years under the Corporate Income Tax and Incentives Rationalization Act (CITIRA), which has been approved by the House of Representatives.

The reform measure is targeted to encourage foreign companies to locate in the Philippines, which is expected to boost job opportunities and infrastructure for the country.

It also authorizes the President of the country to provide non-tax incentives like training of workers for the prospective foreign investors, and extend warehousing, registration, and permitting services.