Various industry associations push for lawmakers to pass an investor-friendly Corporate Recovery and Tax Incentives for Enterprises (CREATE) law that will attract more foreign direct investments (FDIs) as well as help in job generation.
The current CREATE bill eyes the income tax holiday (ITH) period to be offered from two to four years. It will also give special corporate income tax rates of eight to 10 per cent for three- to six-year periods to registered investors after the ITH. Once this bill becomes a law, corporate income tax rate will also be lowered from 30 to 25 per cent.
Semiconductor and Electronics Industry in the Philippines Foundation Inc. (SEIPI) President Dan Lachica said the Philippines should have more competitive incentives to offer amid the pandemic to not lose potential investors to neighboring countries like Vietnam that provides generous tax perks to investors.
Lachica said the ‘Option 2’ provided by Senator Ralph Recto – where there will be no change in the current incentives regime for export enterprises, be it existing or new investments – will likely encourage investors to expand their businesses in the Philippines.