Local and Foreign Investors Seek 5-Year Tax Relief from CREATE Bill
Local and foreign investors are seeking a five-year tax relief from the Senate Bill No. 1357, also known as the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), to give them time to recoup their losses during the COVID-19 pandemic.
An industry group, consisting of 32 foreign and local investors, pleaded to President Duterte and legislators to consider the impact of the pandemic on business operations before approving the CREATE bill.
According to such groups, once the bill is enacted into law, the cost of doing business will balloon in a time where it should be brought down due to the global crisis.
The business group stated, “The pandemic has raised production costs for export firms, whose foreign markets have been badly impacted with depressed economic growth and massive employee layoffs.”
The group appealed to the Congress to exempt them for up to five years from paying the additional taxes that will come with the passage of the bill.
Further, they expressed their preference for Senate President Pro Tempore Ralph G. Recto’s proposal of maintaining the status quo so they can still avail of tax incentives as shifting to the CREATE bill’s fiscal regime would only double their taxes.
The result could lead to the relocation of exporters operation, most of which are multinationals, from the metro to another investment site. That said, the relocation could place the jobs of 60,000 workers at risk.
The group pleaded that the CREATE bill should also include a provision that allows existing investors to register expansion activities and renew incentives. This will encourage more foreign investments into the Philippines as well as uphold the government’s goal of making the grant of incentives time-bound and performance-based.