Salceda pushes for House adoption of Senate's CREATE bill

The House of Representatives should just adopt the Senate version of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill to fast-track its passage, House ways and means committee chairperson Joey Salceda said Friday.

"We can approve it on Monday. I recommended to the Speaker that we approve it on Monday, since as Ways and Means Chair, I pose no material objections to the Senate version. A reservation here and there, but nothing that will make me delay its approval," Salceda said in a statement.

Salceda, principal sponsor of the House version of the corporate tax reform bill which was approved by the lower chamber last year, underscored that it is an "urgent measure" of the Duterte administration even before the COVID-19 pandemic hit.

The current corporate income tax rate in the Philippines is 30%, the highest in the ASEAN region, according to the Department of Finance.

Under CREATE, progressive tax rates would be applied to domestic corporations depending on their assets and taxable income. Those with assets amounting to P100 million and below, as well as those with annual taxable income equivalent to P5 million and below, would be subjected to a 20% tax rate.

Domestic enterprises with assets above P100 million or those with taxable income amounting to more than P5 million would have to comply with a 25% tax rate.

Meanwhile, foreign corporations would have a fixed reduced tax rate at 25%.

"CREATE will be the necessary boost to get the market to be more aggressive. We need aggressive investment in 2021. Otherwise, the economic impacts of COVID-19 will be deeper and more lasting," Salceda said.

The proposed law also aims to rationalize fiscal incentives by making them time-bound, targeted, and performance-based.

The Fiscal Incentives Review Board (FIRB), chaired by the Secretary of Finance, shall be in charge of granting incentives to registered projects or activities with investment capital of above P1 billion.

The grant of incentives to those with investment capital P1 billion and below, meanwhile, shall be delegated to the Investment Promotion Agencies, provided that the FIRB may increase this threshold periodically or as may be necessary.

The measure also gives the President of the Philippines the power to approve a modified set of incentives to attract highly-desirable investments that would usher in more employment opportunities, specifically those with minimum investment capital of P50 billion.

The Senate approved the bill on third and final reading last week.—AOL, GMA News