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Both the Senate and the House of Representatives ratified on Wednesday, February 3, 2021, the report of the bicameral conference committee on the proposed Law on Corporate Recovery and Tax Incentives for Companies (Create).
The final version of the bill, which modifies provisions of the National Internal Revenue Code, will be sent to Malacañang for approval by President Rodrigo Duterte.
Under the bill, the corporate income tax (CIT) will be directly reduced to 25 percent from the current 30 percent.
While this would reduce government revenue by an estimated P37 billion, the same amount is expected to help companies finance their operations and retain employees.
The CIT will be further reduced by one percentage point each year from 2023 to 2027.
The Secretary of the Department of Finance (DOF), Carlos Domínguez III, previously described this measure as the “largest fiscal stimulus program for companies in the history of the country.”
It is part of the government stimulus package for the country’s recovery from the economic consequences of the Covid-19 pandemic.
The measure also extends the expiration period by two years for businesses that pay the current five percent tax on gross earned income (GIE) instead of all national and local taxes. The new expiration period is four to nine years from the existing two to seven years.
The measure also gives the president more flexibility to grant tax and non-tax incentives on the recommendation of the Tax Incentives Review Board.
The House ratifies the report of the bicameral conference committee on the disagreeing provisions of HB 4157 and SB 1357 or the proposed “Corporate Recovery and Tax Incentives for Businesses Act (CREATE).”
– Philippine House of Representatives (@HouseofRepsPH) February 3, 2021
I would like to inform the Filipino people and our business community that the #CREATE Bill has finally moved on! After formally meeting with our @HouseofRepsPH partners to discuss our disagreeing provisions, we finally ratified CREATE today! pic.twitter.com/ggHQCS5LkL
– also cayetano (@piacayetano) February 3, 2021
The measure was known as the Tax Reform Bill to Attract Better High-Quality Opportunities (Trabaho) in the previous Congress, and was renamed the Corporate Income Tax and Incentives Reform Law (Citira).
Additionally, it was renamed Create when the House passed the third and final reading in September 2019. (Marites Villamor-Ilano / SunStar Philippines)
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