The Department of Finance (DOF), together with the Department of the Interior and Local Government and the Department of Trade and Industry has issued new guidelines clarifying the application of local taxes on registered business enterprises (RBEs).
In a statement on Monday, the DOF said the guidelines were issued to address varying interpretations among local government units (LGUs) regarding the implementation of tax incentives, particularly for enterprises transitioning under the CREATE and CREATE MORE frameworks.
“The CREATE MORE Act was designed to make the Philippines a more competitive and investment-friendly destination. Our responsibility now is to ensure that its provisions are implemented clearly, consistently, and effectively,” Finance Secretary Frederick D. Go said.
Under Joint Memorandum Circular No. 01-2026, issued on 30 March, the government standardized the application of local taxes, fees, and charges on RBEs availing themselves of incentives under the CREATE MORE Act to address inconsistent interpretations across LGUs.
The guidelines clarify that the Registered Business Enterprise Local Tax applies to firms enjoying Income Tax Holiday or Enhanced Deductions Regime incentives within economic zones, including expansion projects. The tax is capped at 2 percent of gross income earned from registered activities and will be imposed in lieu of all local taxes, fees, and charges, including local business taxes and real property taxes.
Once adopted through a local ordinance, LGUs may no longer impose separate taxes outside the prescribed framework. The circular also allows investment promotion agencies and LGUs to enter into agreements on tax collection and remittance and clarifies liability for certain real property taxes involving registered enterprises.
The CREATE MORE Act (Republic Act No. 12066), enacted in 2024, strengthened the country’s investment incentives framework to attract more local and foreign investments. The law expanded tax incentives for qualified enterprises, including longer income tax holidays, enhanced deductions, and value-added tax benefits.
It also prioritizes strategic industries such as technology, research and development, cybersecurity, and advanced manufacturing, while encouraging investments outside Metro Manila. The measure aims to boost competitiveness, generate jobs, and support broader economic growth.
Last November, the government approved the P50.7-billion expansion of Samsung Electro-Mechanics Philippines Corp., marking the first project to receive Presidential Incentives under the CREATE MORE Act. Officials said commercial operations are expected to begin by July 2027 and generate more than 3,500 new jobs for Filipinos.