A local think tank on Wednesday urged the House of Representatives to adopt the Senate version of the Corporate Recovery and Tax Incentives for Enterprises (Create) bill.
In a statement, the Action for Economic Reforms (AER) said the Senate version already featured acceptable compromises, warning that amending it further would defeat the measure’s objectives.
“The compromises found in the Senate bill reflect the bottomline agreements that are acceptable to stakeholders from government, business and civil society,” AER President Jessica Reyes-Cantos was quoted as saying in the statement.
“Further adjustments that are not contrary to the spirit of Create can be done through [its] implementing rules and regulations,” she added.
Approved on the second and third reading in the Senate on November 26, Create provides an outright 10-percentage-point cut in the country’s corporate income tax (CIT) rate, lowering it from 30 percent to 20 percent for local businesses with net taxable income equivalent to P5 million and below, and with total assets (excluding land) not exceeding P100 million. Other corporations will benefit from their CIT rate being lowered to 25 percent from 30 percent.
The measure also modernizes fiscal incentives by making them performance-based, targeted, time-bound and transparent.
“This will not only quicken the process of having the law implemented, but will also create certainty, as it avoids further disagreements which may lead to the dilution of the reforms,” Reyes-Cantos said.
AER said it echoed the position of House Ways and Means Committee Chairman and Albay Rep. Jose Maria Clemente “Joey” Salceda, who has recommended that the House adopt the Senate version, so it can be signed into law before the end of the year.
The think tank also said its appeal came amid attempts of the Philippine Economic Zone Authority locators to further amend the bill. They proposed to further raise the threshold amount for investments that require Fiscal Incentives Review Board approval.