BREAKING:New Tax Law Alert: What the Upcoming CREATE MORE Bill Means for Your Business

Aiming to enhance the Philippine tax incentives policy and administration, the legislature recently passed the CREATE MORE bill (Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy), amending the present CREATE. The Bicameral Conference Committee had already approved the bill on September 10, 2024, and once it is signed into law, it will bring about yet another significant change to the country's tax code.

The Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill, which was signed into law last year, has been effectively contributing to the country's economic recovery by providing eligible businesses with incentives. However, realizing the need to further boost the country's economic growth and to stay competitive in the region, the CREATE MORE bill aims to provide a more improved and dynamic tax incentives system.

The main objective of the CREATE MORE bill is to create a business environment that is more conducive for growth and investment by offering enhanced tax incentives to priority sectors and activities, as well as streamlining the country's tax incentives system. This newly introduced bill has gone through a comprehensive process of assessment and rationalization, and it aims to replace the existing tax incentives system that has been in place for over three decades.

Key amendments under the CREATE MORE bill include the improved incentives for enterprises registered under the Strategic Investment Priority Plan (SIPP). Enterprises engaged in activities related to high-technology research and development, high-value manufacturing, healthcare, and disaster risk reduction and management, will now enjoy the enhanced incentives. Similarly, this law has also set forth new rules and requirements concerning the tax incentives that can be availed by the export industry.

Moreover, another notable feature of the bill is its focus on the adoption of digitalization. As the tax authority moves towards a fully digitalized tax administration, the CREATE MORE bill encourages the increased use of digitalized transactions and payments for enterprises. This move is seen as an important step in making tax compliance more efficient and hassle-free for both the tax authority and businesses.

The introduction of the CREATE MORE bill demonstrates the country's commitment to the creation of a pro-growth business environment, characterized by transparent and stable tax policies. The passage of the bill into law is set to make the tax incentives system more competitive in the region and aims to push the growth of high priority sectors, ultimately resulting in the increased creation of high-value employment and sustained economic growth.

Businesses that wish to take advantage of these tax incentives must ensure that they are aware of and comply with the all the relevant requirements and regulations, to avoid any associated risks and maximize the benefits provided by the CREATE MORE bill. Tax professionals also strongly advise businesses not only to ensure compliance but also assess how these proposed amendments can be used as a strategic tool in maximizing business opportunities and accelerating growth.