DTI-BOI hails PRRD signing of CREATE Act

MANILA – The Department of Trade and Industry (DTI) and the Board of Investments (BOI) have hailed the signing of the landmark Republic Act. No. 11534, or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, by President Rodrigo Duterte after it passed both Houses of Congress recently. 

 

“We thank President Rodrigo Roa Duterte and the Congress for enacting the CREATE Act. This is one the most important policy reforms initiated about two decades ago, but has only been successfully legislated under our current administration,” DTI Secretary and BOI Chairperson Ramon Lopez said in a statement Monday. 

  

“First, for business in general, we cannot overemphasize the impact of the reduction in corporate income tax (CIT) from 30 percent to 25 percent for big firms and for small and medium enterprises (SMEs) to 20 percent. The drop is very significant as it will open up cash flows to support efforts of businesses to REBUILD during this pandemic," he added.

 

Lopez also cited the granting of a clearer set of incentives with four to seven years of income tax holidays (ITH) and followed by 10 years of special corporate income tax (SCIT)/ enhanced deductions (ED) for exporters, or five years ED for domestic market enterprises. 

  

“Rather than locate in other countries and export to our domestic market, we have to capture those investments as long as they are in the prioritized sectors and allow them to target the domestic market. This can also encourage higher local content for our manufacturers sourcing from abroad, as part of value chain enhancement.  What’s more, we are also committed in supporting further liberalization to enhance our country’s competitiveness and create more jobs,” he said.  

 

Lopez said a CREATE regime will step up support for industrial development. 

 

“In particular, the option for enhanced deduction will promote investments in developing supply-chain networks, research and development (R&D), and training which are very critical for enhancing the long-term competitiveness of our country.,” he added.

 

The trade chief said the BOI will intensify coordination with the Department of Finance (DOF) for the issuance of the Implementing rules and regulations (IRR) of the CREATE Act, as well as the Strategic Investment Priorities Plan (SIPP) under the same law. 

 

Trade Undersecretary and BOI managing head Ceferino Rodolfo said the BOI is mandated under the CREATE Act to craft the SIPP.

 

“At the moment, we are formulating a transitional SIPP that will be based on the current Investment Priorities Plan (IPP) which was signed by the President in December 2020. It must be highlighted that the said IPP has been consulted extensively with private stakeholders and with other government agencies --in particular with the National Economic and Development Authority (NEDA) and DOF,” he said.

 

The BOI recently conducted the Make It Happen in the Philippines (MIH) campaigns targeting Australia-New Zealand (ANZ) and Europe.  

 

“We also expect projects in the pipeline as they have been awaiting for the passage of the new incentive regime to be finalized and this includes a motorcycle engine assembly project, data centers and IT (information technology) infrastructure network, advanced metal/plastic packaging manufacturing facility, modern textile assembly, to name a few,” Rodolfo said. (PR)

 

Main article here.

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