THE proposed Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) could be approved on final reading ahead of the Congressional break, Senate President Vicente C. Sotto III said on Wednesday.
Mr. Sotto said the Senate Ways and Means Committee will be meeting with the government’s economic managers after Wednesday’s session, which will determine whether the bill will be included on the calendar for deliberations Monday.
“Mag-mi-meeting sila mamaya after the session and therefore makakabalita tayo kung kaya ng sponsorhip on June 1 (They will meet later after the session and we will get word soon if the bill can be sponsored by June 1),” he said in a virtual briefing Wednesday.
“Pwedeng second reading, interpellations ng Monday and Tuesday and then may pag-asang ma-third reading on Wednesday (It’s possible to have second reading and interpellations on Monday and Tuesday and then there is a chance of third reading by Wednesday), or even on the June second itself.”
The measure was certified as urgent by President Rodrigo R. Duterte, thereby allowing the chamber to do away with the three-day interval in approving bills on second and third reading.
House Ways and Means Committee and Albay Rep. Jose Ma. Clemente S. Salceda had said he is open to adopting the Senate version, provided it is “fiscally responsible.”
Congress has until June 3 to act on remaining measures before it goes on a nearly two month break. It is set to resume on July 27.
The CREATE bill is the revised version of the Corporate Income Tax and Incentives Rationalization Act (CITIRA), which now provides for the immediate reduction of the CIT to 25% from the current 30%.
This will further be reduced by 1 percentage point annually beginning 2023 until 2027. In its previous version, the bill proposed to gradually reduce the rate until it reaches 20% in 2029.
The tax reductions were accelerated due to the coronavirus disease 2019 (COVID-19) pandemic. The bill is now positioned as a means of attracting investment from foreign companies looking to move out of China.
“Ito ay mag-e-entice sa mga investors maraming umaalis sa mga lugar na may problema, katulad ng China. Mas maganda ‘yung ang mga investors na ito dito sa Pilipinas (We hope to entice investors moving out of problematic locations like China. We’d prefer that such investors come to the Philippines),” Mr. Sotto also said.
Finance Secretary Carlos G. Dominguez III has described the bill as the “most important economic reform in decades.”
The new version will also extend the sunset period for enterprises enjoying incentives to four years from the 2-7 year period under CITIRA.
The bill forms part of the administration’s comprehensive tax reform program, along with proposals to simplify the tax structure for financial instruments and provide a uniform framework for real property valuation.
The government has so far enacted a measure cutting personal income taxes and increasing or adding levies on several goods and services.
Another law grants an estate tax amnesty and an amnesty on delinquent accounts, while two more laws separately increased the excise tax on alcohol products and conventional and electronic cigarettes. — Charmaine A. Tadalan