The signing of Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act by President Ferdinand Marcos Jr. is expected to cut the bureaucratic red tape that has hampered the growth of the business sector in the country.
Senator Migz Zubiri, author and co-sponsor of the measure, made this statement as he ensured that the CREATE MORE Act addresses problems of longtime investors in the country, including the protracted process of claiming Value Added Tax (VAT) refunds.
“We wanted to straighten out and simplify the process of VAT refunds, because this has been an issue for many major locators in the country.”
“We wanted to straighten out and simplify the process of VAT refunds, because this has been an issue for many major locators in the country. They go years and years without seeing the refunds that they are entitled to, and they lose billions in the process,” Zubiri explained.
The veteran legislator championed the measure after looking into the VAT refund complaints of existing investors in the Philippines, particularly Japanese investors such as Itochu Corporation, the parent company of DOLE Philippines.
“Former Japanese Prime Minister Fumio Kishida himself brought these concerns up with us when we went on a parliamentary visit to Japan in 2023,” the seasoned lawmaker said. “That meeting was crucial in my push for the measure.”
“If existing investors are losing billions here, naturally they would want to leave.”
“If existing investors are losing billions here, naturally they would want to leave, and there are many investment options available to them now, especially among our Southeast Asian neighbors,” the senator added. “If they leave, that’s thousands of jobs gone, and we become a no-go for other potential investors.”
The CREATE MORE, which amends the CREATE Act of 2021, now sets a clear timeline for the application and appeal process for VAT refunds, and limits the documents required from the taxpayer.
In line with his Ease of Doing Business Act and Efficient Government Service Delivery Act, Zubiri also pushed for the CREATE MORE Act to impose a 20-day time frame for the Fiscal Incentives Review Board (FIRB) and Investment Promotions Agencies (IPAs) to act on applications for tax incentives.
Under the new law, the FIRB–the approving authority for enterprises that have a capital threshold above P15 billion–can now grant an incentive period of 24 to 27 years, from the previous 12 to 17 years.
To further streamline the tax landscape, the CREATE MORE Act also ensures that export-oriented enterprises are exempt from paying VAT on domestically purchased materials as well as services that are directly attributable in their production.
“The key to boosting our economy and creating more jobs is inviting more investors in,” Zubiri said. “And the key to inviting more investors in? Taking care of the ones who are already here.”
“With the CREATE MORE Act now signed into law, we can look forward to new investors entering the country, and old ones expanding their investments even further,” he concluded.
