President Ferdinand “Bongbong” Marcos Jr. has signed into law Republic Act No. 12066, also known as the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act on Monday.

This new legislation builds upon the economic reforms introduced by Republic Act No. 11534 or the CREATE law, which was passed in 2021. The original law aimed to help businesses recover losses incurred during the Covid-19 pandemic by lowering corporate income tax rates and streamlining fiscal incentives.  

In his speech, Marcos described CREATE MORE Act as a "testament” to the Philippines’ efforts to become an investment destination.

“This law stands as a symbol of the invaluable insights shared by our international partners, gathered during my trips abroad,” he said.

“Their feedback has enriched this legislation, a reflection of our resolve to foster a climate where businesses will flourish and continue to meaningfully contribute to the Philippine economy,” he added.

Under the new law, the Philippines’ tax regime and incentive framework have been enhanced, encouraging business — both local and international — to make an investment.

It also clarified the rules of availing Value Added Tax (VAT) and duty incentives, and further extends its coverage to include non-registered exporters and high-value domestic market enterprises as well as a more efficient VAT and excise tax refund process.

For local registered business enterprises (RBE), CREATE MORE expands the Enhanced Deductions Regime, offering greater tax relief on other fees and charges.

RBEs are entities registered with the Investment Promotion Agency (IPA) and are organized under Philippine laws; they conduct business in different sectors that contribute to the national economy."

Some of these benefits include the reduction in the income tax rate from 25 percent to 20 percent as well as deductions on power expenses which will benefit the manufacturing sector.

For the tourism industry, a 50 percent deduction for reinvestments and trade fair expenses may be enjoyed.

It also gives RBEs the flexibility to implement Work-from-Home arrangements for up to half of their workforce, without jeopardizing their eligibility for incentives.

Donations of capital equipment, raw materials, spare parts, or accessories to the government, Government-owned or controlled corporations (GOCCs), TESDA, State universities and colleges, and DepEd or CHED accredited schools are likewise tax exempted.

Businesses established before the CREATE Act can continue to enjoy the national and local benefits including tax incentives until 2034. They have until December 2024 to register and avail these incentives as prescribed in the CREATE Act.

Marcos said with these incentives for businesses to enjoy, more job opportunities will be opened.

“CREATE MORE is a tangible proof that we hear and respond to the voices of the business community. This reaffirms our commitment to work hand-in-hand with enterprise, continually seeking avenues to make your investments grow and prosper,” he noted.