THE Fiscal Incentives Review Board (FIRB) has finalized the implementing rules and regulations (IRR) of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, the Department of Trade and Industry (DTI) said.
Trade Secretary Ramon Lopez, who is cochairman of the FIRB, confirmed the status of the CREATE’s IRR on Tuesday at a virtual event.
“The framework for the SIPP [Strategic Investment Priorities Plan] has been passed by the [FIRB] and the [IRR] have just been finalized,” he said.
Asked for further information, Lopez told the BusinessMirror that an “update on IRR will be
announced.”
The DTI and the Department of Finance, under the CREATE’s mandate, are provided 90 days from its effectivity—or until July 11—to sign the IRR. The new tax reform law took effect on April 11.
The IRR will cover the new menu of tax incentives for the investors and the additional functions of the FIRB.
The FIRB has consulted various stakeholders in crafting the CREATE IRR. The Philippine Economic Zone Authority, for example, earlier told this newspaper that it wants to highlight the tax incentives granted to company locators and ecozone development in the IRR.
While only the framework for the SIPP has been approved, the FIRB is using the 2020 Investment Priorities Plan (IPP) for now.
SIPP is the list of investment sectors that may apply for fiscal incentives under CREATE.
Lopez earlier identified the following as critical industries under SIPP: electrical and electronics; chemical and pharmaceuticals; machinery and transport; agriculture and agribusiness; information technology-business process management; research and development; and artificial intelligence, automation, robotics, and digital technologies.
Prior to the enactment of CREATE, IPP was already in place after it was signed by President Duterte in December last year. It identifies economic activities which may be entitled to incentives, including investments generating job opportunities outside of congested urban areas, commercialization of uncommercialized patents on products and services and export business, among others.
“Yes, the IPP is still being used as the transitional SIPP and the framework of both are very similar,” Lopez told the BusinessMirror.
Under CREATE, the corporate income tax rate is reduced to 20 percent from 30 percent for domestic corporations with net taxable income of P5 million and below and have total assets of P100 million and below effective July 1, 2020. All other local firms and resident foreign companies are imposed a 25-percent income tax.
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