Finance Secretary Seeks CREATE Act Revision for Investment Boost

March 28, 2024

Proposed Amendments to the CREATE Act to Bolster Philippine Economy

Finance Secretary Ralph Recto is championing significant amendments to the Corporate Recovery and Tax Incentives for Enterprises Law, commonly known as the CREATE Act, with the intention of drawing more investments into the Philippines. The CREATE Law, which was originally passed as a form of economic relief for companies during the Covid-19 pandemic, has already made strides by cutting the corporate income tax rate from 30% to 25% for both domestic and foreign corporations.

In a recent gathering with the Manila Overseas Press Club on March 20, Recto outlined his vision for these amendments. “We anticipate this to be a transformative measure to enhance the business climate in the Philippines, attract investments, and generate more high-quality jobs for our people,” he expressed with optimism.

The proposed changes include a further reduction of the income tax rate to 20% for domestic and resident foreign corporations. Additionally, Recto’s proposal seeks to streamline the value-added tax refund process, aiming to establish an expedited system with fewer documentary requirements and quicker processing times, particularly for low-risk claims.

Recto’s strategy is clear: stimulate investment and economic expansion through reforms. “We will enhance investments by reducing the cost of doing business, improving the regulatory framework, and eliminating constraints,” he stated, highlighting the administration’s commitment to creating a more business-friendly environment.

Efforts by President Bongbong Marcos Jr.’s administration, such as the enactment of the Ease of Paying Taxes Act and revisions to the Public-Private Partnership Code, are indicative of a broader push to attract investment and spur economic growth.

With an ambitious goal to significantly reduce poverty levels in the country, Recto emphasized the administration’s determination. “We are determined not to fall short of achieving this critical goal,” he said, aiming to lower poverty incidence to single-digit levels by 2028. This target is not just about economic numbers but about real-life impacts: increased employment opportunities, better education, and improved health outcomes for millions of Filipinos.

tax incentives
The CREATE Acts tax incentives can attract foreign direct investment to the Philippines by reducing corporate income tax, offering targeted deductions, and providing fiscal perks, thereby enhancing the countrys competitiveness in the global market.

Can the CREATE Act revision truly lower taxes for select firms?

Send a request and get a free consultation:

Learn more about business licenses

February 2025
Businesses Secure Long-Term Stability with New Lease Agreements
The EURUSD currency pair remains in a tight range above the 1.0900 support level on Monday as it struggles for direction. Investors seek fresh cues at the start of a busy data week, which may indicate how much the Federal Reserve will cut interest rates in September.
India Sees 22.5% Growth in Tax Collections, Boosted by Lease Revenues
India's net direct tax collections saw a significant boost, growing by 22.5% as of August 11, compared to 19.54% the previous month. This surge was driven by a 30% rise in Personal Income Tax revenues and a 111% increase in Securities Transaction Tax receipts, despite modest corporate tax growth.
Lawmakers Consider Alternatives as Lease Deduction Nears Expiration
Lawmakers are evaluating alternatives to the expiring 20% deduction for qualified business income introduced by the Tax Cuts and Jobs Act. One option is corporate integration, which could address existing distortions. Businesses with a lease may also be impacted by these potential changes.

Georgia small business guide

  • Starting a business
  • Local regulations
  • Funding options
  • Networking opportunities
    Thanks for the apply!
    We will get back to you within 1 business day
    You can schedule a call time at your convenience now:
    In the meantime, you can get a free consultation
    with our AI-assistant