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Business

Over 50 business groups back passage of CREATE

Louella Desiderio - The Philippine Star

MANILA, Philippines — Over 50 business groups have joined the call for the immediate enactment into law of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill, noting every day of delay puts the country at risk of losing more jobs and investments amid the COVID-19 pandemic.

The CREATE bill seeks to reduce the corporate income tax (CIT) rate and introduce changes in the grant of incentives to help businesses reeling from the impact of the pandemic.

The groups consist of ACI Philippines, Anvil Business Club, Ateneo Law Alumni Association Inc., Bankers Association of the Philippines, Cebu Business Club, Cebu Leads Foundation, Chamber of Thrift Banks, Chinese Filipino Business Club Inc., CIBI Foundation Inc., Federation of Filipino – Chinese Chambers of Commerce and Industry Inc., Federation of Indian Chambers of Commerce Philippines Inc., Financial Executives Institute of the Philippines, Fintech Philippines Association, FinTech Alliance Philippines, Foundation for Economic Freedom, French Chamber of Commerce and Industry in the Philippines, Fund Managers Association of the Philippines, Guild of Real Estate Professionals, Hotel and Restaurant Association of the Philippines, Institute for Solidarity in Asia Inc., Institute of Corporate Directors, Integrated Bar of the Philippines, Intellectual Property Association of the Philippines, Investment House Association of the Philippines, Information Technology and Business Process Association of the Philippines, Licensing Executives Society Philippines, Makati Business Club, Management Association of the Philippines, Money Market Association of the Philippines, National Real Estate Association Inc., Nordic Chamber of Commerce of the Philippines Inc., Organization of Socialized Housing Developers of the Philippines, Philippine Association of Securities Brokers and Dealers Inc., Philippine Bar Association, Philippine Center for Entrepreneurship (Go Negosyo), Philippine Council of Associations and Association Executives, Philippine Franchise Association, Philippine Hotel Owners Association Inc., Philippine Institute of Certified Public Accountants, Philippine Life Insurance Association, Philippine Retailers Association, Philippine Women’s Economic Network, Procurement and Supply Institute of Asia, Rural Bankers Association of the Philippines, Shareholders’ Association of the Philippines, Spanish Chamber of Commerce in the Philippines, Subdivision and Housing Developers Association, Tax Management Association of the Philippines, Trust Officers Association of the Philippines, University of the Philippines School of Economics Alumni Association and the Women’s Business Council Philippines.

The House of Representatives and Senate are reconciling provisions of the CREATE bill before endorsing it to the President for approval.

“CREATE is a historic economic reform, one of the largest in decades. As a stimulus package, CREATE will be a boost to market confidence, providing instant relief to businesses suffering from business reverses due to the COVID-19 pandemic,” the groups said.

The groups said they support the quick cut in CIT under the bill.

For small and medium enterprises earning net taxable income not exceeding P5 million, the CIT would be brought down to 20 percent from 30 percent.

For corporations, the CIT rate would be trimmed to 25 percent from 30 percent.

Apart from bringing the  CIT rate closer to the 21.65 percent average in Southeast Asia, the reduction would also help firms have resources to keep their employees and support operations as challenges remain due to the pandemic.

“As an investment-attracting move, the CIT cut also alters the financial prospectus of the Philippines for the better,” the groups said.

Through the flexibility to be given to the Fiscal Incentives Review Board and the President in the grant of incentives under CREATE, the groups are hopeful the country could attract high-value investments.

The groups said the 10-year transition period to be given under the bill to firms currently availing of incentives would also address concerns on the changes in the tax regime.

Earlier this week, the country’s largest business organization, the Philippine Chamber of Commerce and Industry, also urged the government to prioritize the passage of CREATE.

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