Projects with CREATE tax perks reach P414 billion

MANILA, Philippines — The Cabinet-level Fiscal Incentives Review Board (FIRB) has approved 17 projects worth P414 billion since its creation in 2021 following the enactment of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.

Finance Secretary and FIRB chairperson Benjamin Diokno said total investment capital from approved priority activities with incentives under the CREATE Law has already reached P414.3 billion.

Approved applications cover the period from August 2021 up to end-December last year.

During the fourth quarter last year, the FIRB approved the tax incentives application of TDK Philippines Corp. for the manufacture of microwave-assisted magnetic recording sliders.

The P2.5 billion project brought the total to over P414 billion as of end-2022.

To recall, CREATE cut the corporate income tax rates to make them comparable with the ASEAN region.

The law also adopted a simpler and more effective fiscal incentives system, ensuring that incentives are performance-based, time-bound, targeted and transparent.

Pursuant to the CREATE Law, the FIRB is mandated to oversee the grant and administration of incentives of investment promotion agencies (IPAs).

Under the law, IPAs approve the incentives of projects below P1 billion, while the FIRB selects the tax perks for business activities above P1 billion.

Meanwhile, the 17 approved projects worth over P400 billion are involved in cement and steel rebars manufacturing activities, mass housing development, shipbuilding, rail operations of a subway, water transport vessel, and hybrid LNG import facility and terminal.

It also covered an industrial zone operator with activities in support of exporters, a motor vehicle manufacturing firm, and telecommunications infrastructure such as data centers and high-speed broadband services.

Most projects are located outside Metro Manila such as in Pampanga, Zambales, Batangas, Bulacan, Laguna, Iloilo, Cebu, and Davao del Sur, which is expected to boost rural development in the country.

Of the projects, the biggest is for the establishment of connectivity facilities for high-speed broadband services of Converge ICT Solutions Inc. worth P150.6 billion.

This is followed by the P81.1-billion Makati Subway project which is set to begin operations by 2026 and is expected to contribute to the development of the capital’s transport system.

There is also a combined P78.2-billion telecommunications infrastructure project of three telco firms in multiple locations.