Lawmakers should pass a Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill that is investor-friendly and will attract more foreign direct investments (FDIs) as well as help in job generation.
The country needs more competitive incentives to offer amid the pandemic so the country would not lose potential investors to neighboring countries like Vietnam that provides generous tax perks to investors, said Semiconductor and Electronics Industry in the Philippines Foundation, Inc. (SEIPI) president Dan Lachica.
Debates are still ongoing in the Senate for the CREATE bill, which 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 8 to 10 percent for three- to six-year periods to registered investors after the ITH.
But this also means existing investments which granted 5-percent gross income earned (GIE) incentive that will be ceased and will adjust to the new special tax rates after a transition period of four to nine years.
After this, these projects are expected to pay the regular corporate income tax rate, which will also be lowered to 25 percent from the current 30 percent once the bill is enacted into law.