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.