Finance Secretary Seeks CREATE Act Amendments to Boost Investment

March 28, 2024

CREATE Act Amendments to Bolster Philippine Investment Climate

In a bid to further enhance the Philippines’ attractiveness to investors, Finance Secretary Ralph Recto has announced a push for significant amendments to the Corporate Recovery and Tax Incentives for Enterprises Law, commonly known as the CREATE Act. The law, originally designed to provide economic relief to companies during the Covid-19 pandemic, is set for an overhaul with the aim of boosting the country’s business environment.

Already having reduced the corporate income tax rate from 30% to 25% for both domestic and foreign corporations, the CREATE Law’s new amendments could see this rate lowered even further to 20% for domestic and resident foreign corporations. Recto, addressing the Manila Overseas Press Club, highlighted the importance of these reforms in transforming the business climate and creating high-quality job opportunities for Filipinos.

The proposed changes don’t stop at tax reductions. They also include a streamlined process for value-added tax refunds characterized by minimal documentary requirements and expedited processing times, especially for low-risk claims. This move is expected to alleviate the tax refund system for registered business enterprises, making it more efficient and investor-friendly.

Recto’s strategy revolves around stimulating investments and expanding the economy by reducing the cost of doing business, improving regulatory frameworks, and eliminating constraints. He emphasized that replacing bureaucratic hurdles with a welcoming environment is key to encouraging investments that will spur growth.

These efforts align with President Bongbong Marcos Jr.’s administration’s initiatives, such as the enactment of the Ease of Paying Taxes Act and amendments to the Public-Private Partnership Code, all aimed at attracting investments.

The overarching goal of these economic reforms is ambitious: to lift 14 million Filipinos out of poverty and reduce poverty incidence to single-digit levels—between 8-9% by 2028. Recto remains steadfast in this commitment, viewing it as a critical indicator of how economic growth can lead to tangible improvements in employment, education, and health outcomes for ordinary Filipinos.

tax incentives
The CREATE Act offers tax incentives to stimulate investment, reduce corporate income tax, and enhance competitiveness, aiming to spur economic growth and job creation in the Philippines.

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