President Rodrigo Duterte has signed into law the Corporate Recovery and Tax Incentives for Enterprises (CREATE) measure which will reduce corporate income tax from 30% to 25% corporations, and 20% for micro, small and medium enterprises.
Albay Representative Joey Salceda, the chairman of the House Committee on Ways and Means, announced on Friday Duterte enacting the CREATE law.
“This brings the maximum length of incentives for less-developed, disaster-recovering areas to 22 years, among the most generous in Asia,” Salceda said.
“CREATE has been created. This is one of the pins of light signaling the end of this dark economic tunnel,” he added.
Salceda, an economist, expected the measure to help the countryside as it would grant provinces the longest and biggest amount of tax incentives of up to 17 years for new locators, and a bonus of three-year long income tax holiday for those relocating from National Capital Region.
Presidential spokesperson Harry Roque later confirmed that the President indeed signed the CREATE law.
Salceda said he would call Finance Secretary Carlos Dominguez to ensure that people had enough time or leeway during the April 15 tax filing deadline.
“The changes in the tax code due to CREATE will clearly entail some significant accounting work on the part of businesses. If an extension is not doable, we may work out other arrangements,” Salceda said.
Duterte, however, vetoed nine provisions of the CREATE measure, including the automatic approval of applications for tax incentives if they are not acted on within 20 days from the date of submission of the application.
“The automatic approval of applications runs counter to the declared policy to approve or disapprove applications based on merit. The core of the reform is to develop a performance-based tax incentives system,” the President said in his veto message. -NB, GMA News