Over P1 trillion projects get tax perks under CREATE

MANILA, Philippines —  The government has approved 900 projects worth P1.02 trillion since the enactment of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.

Data from the Department of Finance (DOF) showed that total investment capital from approved priority activities with incentives under the CREATE Law has reached P1.02 trillion.

Approved applications cover August 2021 up to end-October 2023. It also covers 910 CREATE-approved projects across priority sectors listed in the Strategic Investment Priority Plan.

Broken down, the bulk or 80 percent of the investment capital worth P817 billion was approved by the Cabinet-level Fiscal Incentives Review Board (FIRB).

This is equivalent to 49 big-ticket tax incentive projects in the sectors of information and communications technology, transportation and storage, manufacturing, energy, economic zone operation, mass housing, tourism, human health activities and IT-business process management.

The remaining 20 percent or P203 billion came from investment promotion agencies (IPAs) covering 861 projects.

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.

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 performanced-based, time-bound, targeted and transparent.

Incentivized projects and activities under the structural tax reform are to achieve performance metrics, to ensure that the grant of fiscal support to registered business enterprises leads to higher economic returns.

Further, the over 900 projects are expected to generate nearly 100,000 jobs within its incentivized period, with the labor-intensive manufacturing sector having the highest number of approved projects among the priority sectors.

This underscores the employability of the country’s workforce in high-quality jobs that will contribute to long-term economic growth,” the DOF said.

The DOF maintains that CREATE continues to play a crucial role in positioning the country as a global investment hub.