Connect with us

Hi, what are you looking for?

Economy

CREATE’s lower corporate tax rate to be applied retroactively

THE PROPOSED 25% corporate income tax (CIT) will be applied retroactively to July 1, 2020 if the Corporate Recovery and Tax Incentives for Enterprises (CREATE) legislation is signed, Finance Secretary Carlos G. Dominguez III said.

“This will allow taxpayers to properly adjust their books and returns for the filing season as the reduction of the CIT rate will be retroactively applied to July 1 of this year,” Mr. Dominguez said in a statement over the weekend.

The lower tax rate will thus cover half of 2020.

The Senate approved Senate Bill No. 1357 or the CREATE bill on third and final reading last week, cutting the corporate income tax to 25% from 30% currently, with further reductions of one percentage point each year starting 2023 until it falls to 20% by 2027.

The Senate version allows for small firms with assets of up to P100 million and up to P5 million in net taxable income to enjoy an expedited reduction to 20% this year.

The measure also seeks to reform the tax system and give more power to the Fiscal Incentives Review Board to give tailored incentives.

“These reforms in the fiscal incentives system are crucial for us to be able to compete for high-value investments, which are what we want to attract. The passage of CREATE is timely as many investors located in China are now looking for alternative destinations to avoid a repeat of the supply chain disruptions they encountered earlier,” Mr. Dominguez said.

A Bicameral Conference Committee will no longer be needed since the House of Representatives has agreed to adopt the Senate’s version, according to Albay Representative Jose M. Clemente S. Salceda.

The measure is revenue-negative and will result in P40 billion worth of foregone revenue this year, and P650 billion over the next five years.

The CREATE bill forms part of the government’s recovery package along with the P140-billion Bayanihan to Recover as One Act (Bayanihan II), or Republic Act 11494.

Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua has said the timely passage of the measure will help the economy bounce back faster from the recession, especially small- and medium-sized enterprises that were among the hardest hit by the crisis.

“With CREATE, the country will also be able to attract more foreign direct investment with an improved incentives menu, which will maximize desirable economic outcomes such as job creation, domestic value added, and technology transfer,” he said in a statement Friday. — Beatrice M. Laforga

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

A Saudi flag flutters atop Saudi Arabia’s consulate in Istanbul, Turkey Oct. 20, 2018. — REUTERS/HUSEYIN ALDEMIR/FILE PHOTO RIYADH — Saudi Arabia’s crown prince...

Economy

IN FEB. 2019, Facebook, Inc. set up a test account in India to determine how its own algorithms affect what people see in one...

Economy

CHINA’S economy risks slowing faster than investors realize as President Xi Jinping’s push to cut its reliance on real estate and regulate sectors from...

Economy

Faced with a high level of competition in an era of streaming services, content providers must stay ahead by developing a strong user experience...

Economy

The Philippines remains under a “gray” list of countries under increased monitoring for money laundering and terrorism financing risks, despite some progress in implementing...

Investing

A Brewdog promotion which said customers could win “solid gold” beer cans was misleading, the advertising watchdog has found. The Scottish brewer offered shoppers...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Economy

Pfizer Inc on Wednesday raised its 2021 sales forecast for its COVID-19 vaccine by 29% to $33.5 billion, and said it believes people will...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.



Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!