Marcos inks CREATE MORE Act

President Ferdinand “Bongbong” Marcos Jr. on Monday signed the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act, which aims to create more jobs and bring in new investors to the country.

The CREATE MORE Act, or Republic Act No. 12066, is a priority legislation of the Marcos administration. It amends Republic Act 11534 or the original CREATE Act that was crafted to help enterprises recover from the impact of the pandemic by lowering the corporate income tax rates.

In his speech, the President said the signing of the measure was a resounding testament of the government's commitment to make the Philippines the destination of choice for investments.

''This law stands as a symbol of the invaluable insights shared by our international partners, gathered during my trips abroad. Their feedback has enriched this legislation, a reflection of our resolve to foster a climate where businesses will flourish and continue to meaningfully contribute to the Philippine economy,'' Marcos said.

Marcos stressed that the CREATE MORE Act sets the stage for a business landscape that empowers the country's enterprises and enhances their growth prospects.

''By building on the reforms initiated through the CREATE Act, we have enhanced our tax regime [and] incentive framework, and making it more inviting for investment—while remaining steadfast in the principles of fiscal prudence and stability,'' he said.

According to the President, the new law will push for the establishment of a more efficient approval process by raising the investment capital approval threshold for our Investment Promotion Agencies from P1 billion to P15 billion pesos.

This will guarantee that only projects exceeding this amount will now require review by the Fiscal Incentives Review Board, said Marcos.

The new law exempts from value-added tax (VAT) goods and services such as janitorial, security, financial consultancy, marketing, and human resources.

It also aims to simplify the tax process for businesses by introducing a not more than 2% Registered Business Enterprise Local Tax (RBELT) based on gross income.

Further, the registered business enterprises (RBEs) under the enhanced deductions regime will benefit from a reduced corporate income tax rate of 20%.

The new law also provides tax or duty exemption on donations of capital equipment, raw materials, spare parts, or accessories to the government, and Government owned and controlled corporations (GOCCs), Technical Education and Skills Development Authority (TESDA), State Universities and Colleges, and the Department of Education or accredited schools of the Commission on Higher Education (CHED). 

The said measure also seeks the enhancement of the competitiveness of tax incentives to make the country's incentive system more attractive to investors and businesses.

Senate President Francis “Chiz” Escudero has said the new law would bring more investors to the country by providing “a more predictable and sustainable playing field.”

From 2025 to 2028, the revenue estimate of the measure is at -P5.90 billion revenue loss, which is equivalent to -0.0044% of the projected gross domestic product of the same period.

Interest from FDIs

Meanwhile, Presidential Adviser on Investment and Economic Affairs Secretary Frederick Go said the signing of CREATE MORE Act has triggered a lot of interest from foreign direct investors (FDIs). 

''We have a lot of interest in the developments of CREATE MORE,'' Go told Palace reporters. ''Even just the talks of the government, of the legislature, considering the passage of CREATE More alone triggered so much interest from all the overseas foreign direct investors.''

''We have for electronics, we have in steel, we have in offshore wind, we have in renewable energy, other forms of renewable energy, a lot, shipyard building, so a lot of sectors,'' Go added when asked what sectors are interested in this new law. 

Go said these interested investors come from Korea, China, Japan, Australia, and the United States. He expressed confidence that the new law is also a good way to entice the Trump administration to invest more in the Philippines. 

The law was authored by Senators Sherwin Gatchalian, Juan Miguel Zubiri, Risa Hontiveros, and Minority Leader Aquilino Pimentel III in the Senate., and Albay Representative Joey Salceda in the House of Representatives. — KBK/RSJ, GMA Integrated News