Statement of Support for CREATE (revised CITIRA)
25 May 2020 - The Philippine Chamber of Commerce and Industry (PCCI), the largest umbrella of business organizations in the country representing an estimated 30,000 large, medium, small and micro-enterprises (MSMEs) nationwide, strongly supports the immediate passage of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE, formerly the CITIRA or the Corporate Income Tax and Incentives Reform Act CITIRA).
PCCI President, Amb. Benedicto V. Yujuico said the enhancements made to the CITIRA under the CREATE will boost the recovery of firms reeling from the economic slowdown. Specifically, he cited the immediate reduction of the Corporate Income Tax from thirty percent to twenty-five percent, the savings generated from which would help fund the continued operation of businesses. Moreover, bringing the country closer to the ASEAN average of 23% will help draw in multinational firms seeking alternative sourcing markets and manufacturing base.
The extension of the applicability of the net operating loss carryover (NOLCO) for losses incurred in 2020 from the current three years to an extended five years will allow companies to deduct incurred losses from tax payments for a longer period, providing them more time to set their finances in order. In view that the community quarantines have resulted to substantial losses across all industries and sectors, we request that the extension be extended to all firms, regardless of size to protect current employment.
Including more flexibility in granting fiscal and non-fiscal incentives will be critical as the country competes internationally for high-value investments. We support the proposed strategic, tailored approach to attracting potential investments that are uniquely deserving of incentives.
The granting of a maximum transitory period of nine years for will provide businesses currently enjoying fiscal incentives adequate time to make the necessary adjustments before finally shifting to the new tax regime.
The damage COVID-19 and the corresponding lockdown imposed to mitigate its spread has seriously damaged the economy. The business sector needs the package of reforms introduced under CREATE to help businesses recover, ensure their resilience and create more sustainable economic opportunities.
We therefore call on the Senate and the House of Representatives to accelerate the enactment of the bill into law.