Daily TribuneBy allowing up to 50 percent of employees to work from home, the bill acknowledges the evolving needs of modern businesses and workers alike, setting the stage for a more flexible, resilient and competitive economic landscape.
CREATE MORE provides tax incentives or corporate adjustments.
photographs courtesy of marketplace
The workplace landscape is changing once again, thanks to the recent congressional approval of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Bill.
This bill, touted as a top priority by the Legislative–Executive Development Advisory Council (LEDAC), is set to redefine how businesses operate in the Philippines, particularly in the realm of work-from-home (WFH) arrangements.
As part of the key amendments under CREATE MORE, registered business enterprises (RBEs) may now be allowed up to 50 percent work-from-home arrangements, subject to the rules and regulations of their respective investment promotions agency (IPA).
This provision, tucked within Section 26 of the Senate’s version of the bill, not only offers companies greater flexibility but also reflects a broader shift in workplace norms that have been evolving since the pandemic began.
Adapting to the new normal
With hybrid work models becoming increasingly popular worldwide, this move is expected to attract more foreign direct investments, boost job generation and improve living standards, according to Senate Ways and Means Committee Chair Sherwin Gatchalian.
The flexibility to maintain a partial WFH setup will also have a significant impact on the IT-Business Process Management (IT-BPM) sector, which has been a major driver of the country’s economy.
Colliers, a leading real estate advisory firm, notes that this development is poised to affect the office market dynamics significantly.
Businesses that have downsized their office spaces or shifted to more flexible work arrangements during the pandemic might need to recalibrate their real estate strategies in the coming months.
Firms that have applied for the PEZA–BOI (Philippine Economic Zone Authority–Board of Investments) paper transfer in 2023 may need to reassess their office requirements to comply with the new rules, which could mean a partial return to physical offices.
Incentives galore
Beyond the WFH provision, CREATE MORE introduces a suite of tax incentives aimed at making the Philippines a more attractive destination for businesses.
One of the major changes includes a reduction of corporate income tax from 25 percent to 20 percent for both domestic and foreign companies, a move expected to lure more investors looking for favorable tax regimes.
Additionally, RBEs with capital stock over P20 billion will enjoy a zero-rated value-added tax (VAT) on local purchases, VAT exemption on imports and duty exemptions on imports of capital equipment, raw materials, spare parts and accessories.
Export-oriented RBEs stand to gain even more, with VAT zero-rating extended to essential services like janitorial, security, financial consultancy, marketing and human resources.
These changes are designed to simplify tax processes and reduce operational costs, which are crucial factors for businesses deciding where to set up shop.
Creating a ripple effect
House Ways and Means Committee Chair Joey Salceda emphasized that the bill builds on the progress achieved by the Create Act and responds to emerging developments in the global economy.
By providing clearer guidelines on tax exemptions, zero-rating and WFH arrangements, Create More aims to offer investors greater regulatory stability and transparency — key components that make a country an appealing business destination.
As the country awaits the President’s approval of the bill, companies are already bracing for the impact. For some, this means a return to office life, albeit in a limited capacity, while others may continue to capitalize on the flexible work arrangements that have defined the past few years.
CREATE MORE is not just about tax incentives or corporate adjustments; it’s about reimagining the future of work in the Philippines.
By allowing up to 50 percent of employees to work from home, the bill acknowledges the evolving needs of modern businesses and workers alike, setting the stage for a more flexible, resilient and competitive economic landscape.
