The Senate Bill No. 1357 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Bill, formerly known as Corporate Income Tax and Incentives Reform Act (CITIRA) was passed on its third and final reading by the Senate on 26 November 2020 with twenty out of twenty-one (20/21) senators voted in favor, and one (1) opposed.
Once it has been enacted into law, corporate income taxes (CIT) will be reduced from 30% to 25%, time-bound & performance-based incentives will be induced, and fiscal incentives will be rationalized to further attract necessary foreign direct investments.
This measure allows exporters and domestic industries to avail between four to seven (4-7) years of income tax holiday (ITH). They may later pay the 5% gross income earned (GIEc) for 10 years.
To also help the Philippine economy rise from the afflicting impacts of the COVID-19 pandemic and keep the Philippines highly competitive in ASEAN, the Bill ensures a more relevant response to critically-impacted businesses, and forms part of the Bayanihan to Recover as One Act that allocates up to Php165 billion for assistance. -KJS