Duterte-era law bonanza? 99,000 new jobs expected
Over 99,000 new jobs are expected to be created by new investments approved under the Duterte-era corporate tax reform law.
As of October 2023, a total of 910 projects with a combined worth of P1.02 trillion are poised to receive tax incentives under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, data released on Thursday by the Department of Finance (DOF) showed.
Those investments are expected to generate 99,400 jobs during the limited time that they are able to enjoy the fiscal perks from the government, according to the DOF.
Of the 910 projects, 49 investments amounting to P817 billion were given the green light by the Fiscal Incentives Review Board, which is in charge of policy making and overseeing the administration and grant of tax incentives under CREATE.
The remaining 861 projects with an investment capital of P203 billion were approved by economic zones, whose main appeal is the menu of tax incentives that they offer to investors.Enacted in 2021, the CREATE law instantly slashed the corporate income tax rate to 25 percent for large companies, and to 20 percent for small firms.
This, while keeping intact some incentives that the government deemed excessive, like income tax holiday, for a much longer period before being dismantled eventually.
It was a legislation whose intention dated back to the Ramos administration, which sought to restructure costly tax perks to improve state revenues. During the pandemic, former President Rodrigo Duterte repackaged his corporate tax reform proposal as a “stimulus package” for companies.According to the DOF, the government attracted P572.98 billion in investment pledges using CREATE as one of its draws. These commitments may or may not materialize in the future.
In November last year, the House Committee on Ways and Means approved a bill that would amend CREATE and tackle the issues raised by investors about its current version. Among the proposed tweaks include further reduction in the corporate income tax rate to 20 percent from the current 25 percent and clarifications on the value-added tax provision. INQ
