The proposed Corporate Recovery and Tax Incentives for Enterprises (Create) Act has earned the support of former government officials, state bankers and other experts.
In a June 3 statement shared by the Department of Finance, former finance and socioeconomic planning secretaries and economists said they support “the immediate passage” of Create “as a much-needed boost to the recovery of the Philippine economy, and as a necessary policy tool for retaining and creating jobs that will help our people secure their livelihoods against the adverse impacts of Covid-19 (coronavirus disease 2019).”
Create is the recalibrated version of the Corporate Income Tax and Incentives Reform Act that aims to reduce the corporate income tax rate to 25 percent by July.
The signatories stressed that “the immediate 5-percent cut in the corporate income tax strikes a good balance between the fiscal needs of our country and the need to support businesses.”
The measure also extends the net operating loss carryover for nonlarge taxpayers from the current three years to five, which will be credited for losses incurred in 2020.
This extension, according to the signatories, “incentivizes businesses that have incurred losses due to Covid-19 to remain operational and keep Filipino jobs.”
Another key feature of the bill is the extension of the sunset period for current incentive recipients from four to nine years.
“This extension will help registered enterprises adjust more effectively, while giving them the opportunity to shift to the new incentives regime immediately, should they find it more advantageous,” they said.
“Though some of us have reservations regarding the longer transition period, we support it, in the interest of urgent passage of this historic reform,” they added.
Create would also introduce flexibility to the Fiscal Incentives Review Board, which would be allowed to recommend to the President the granting of longer incentives and additional nonfiscal ones for deserving investments.
This “repositions the country to compete for investments that will serve the public interest above and beyond more typical investments,” the signatories said.
They warned that delaying Create’s passage would result in undue uncertainty and cost Filipinos opportunities for better jobs and business prospects.
“We therefore urge the Senate, the House of Representatives, and all units of the Executive to rally around this historic and meaningful reform. What we do in the coming weeks will be recorded in historical accounts of this challenging period and what will follow,” the signatories said.
The signatories are former Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr.; former Finance chiefs Roberto de Ocampo, Margarito Teves, Jose Camacho and Jose Pardo; former Prime Minister Cesar Virata; Monetary Board (MB) member and former Socioeconomic Planning Secretary Felipe Medalla; former Socioeconomic Planning Secretary and Ateneo de Manila University professor Cielito Habito; MB member Bruce Tolentino; former Finance Undersecretary and Foundation for Economic Freedom Vice Chairman Romeo Bernardo; former University of the Philippines (UP)-Los Baños vice chancellor and current Asian Development Bank Institute board member Fermin Adriano; dean Joel Tan-Torres and tax and incentives policy experts professor emeritus Epictetus Patalinghug of UP Virata School of Business; professor Renato Reside of the UP School of Economics (UPSE), UPSE Alumni Association President Jeffrey Ng, former Philippine Institute of Development Studies President Gilberto Llanto; and Action for Economic Reforms coordinator Filomeno Sta. Ana 3rd.
In a June 3 statement shared by the Department of Finance, former finance and socioeconomic planning secretaries and economists said they support “the immediate passage” of Create “as a much-needed boost to the recovery of the Philippine economy, and as a necessary policy tool for retaining and creating jobs that will help our people secure their livelihoods against the adverse impacts of Covid-19 (coronavirus disease 2019).”
Create is the recalibrated version of the Corporate Income Tax and Incentives Reform Act that aims to reduce the corporate income tax rate to 25 percent by July.
The signatories stressed that “the immediate 5-percent cut in the corporate income tax strikes a good balance between the fiscal needs of our country and the need to support businesses.”
The measure also extends the net operating loss carryover for nonlarge taxpayers from the current three years to five, which will be credited for losses incurred in 2020.
This extension, according to the signatories, “incentivizes businesses that have incurred losses due to Covid-19 to remain operational and keep Filipino jobs.”
Another key feature of the bill is the extension of the sunset period for current incentive recipients from four to nine years.
“This extension will help registered enterprises adjust more effectively, while giving them the opportunity to shift to the new incentives regime immediately, should they find it more advantageous,” they said.
“Though some of us have reservations regarding the longer transition period, we support it, in the interest of urgent passage of this historic reform,” they added.
Create would also introduce flexibility to the Fiscal Incentives Review Board, which would be allowed to recommend to the President the granting of longer incentives and additional nonfiscal ones for deserving investments.
This “repositions the country to compete for investments that will serve the public interest above and beyond more typical investments,” the signatories said.
They warned that delaying Create’s passage would result in undue uncertainty and cost Filipinos opportunities for better jobs and business prospects.
“We therefore urge the Senate, the House of Representatives, and all units of the Executive to rally around this historic and meaningful reform. What we do in the coming weeks will be recorded in historical accounts of this challenging period and what will follow,” the signatories said.
The signatories are former Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr.; former Finance chiefs Roberto de Ocampo, Margarito Teves, Jose Camacho and Jose Pardo; former Prime Minister Cesar Virata; Monetary Board (MB) member and former Socioeconomic Planning Secretary Felipe Medalla; former Socioeconomic Planning Secretary and Ateneo de Manila University professor Cielito Habito; MB member Bruce Tolentino; former Finance Undersecretary and Foundation for Economic Freedom Vice Chairman Romeo Bernardo; former University of the Philippines (UP)-Los Baños vice chancellor and current Asian Development Bank Institute board member Fermin Adriano; dean Joel Tan-Torres and tax and incentives policy experts professor emeritus Epictetus Patalinghug of UP Virata School of Business; professor Renato Reside of the UP School of Economics (UPSE), UPSE Alumni Association President Jeffrey Ng, former Philippine Institute of Development Studies President Gilberto Llanto; and Action for Economic Reforms coordinator Filomeno Sta. Ana 3rd.
