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Monday, July 15, 2024

CREATE law seen creating 100,000 jobs

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The Department of Finance (DOF) said projects under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act are expected to generate nearly 100,000 jobs.

It said Republic Act No. 11534 also led to investment projects worth P1.02 trillion as of October 2023.

“This monumental achievement is a testament to the continuous efforts of the PBBM administration to promote the Philippines as a sound investment destination,” the agency said.

The DOF said the government gained P572.98 billion worth of foreign direct investment (FDI) pledges from 910 approved projects across priority sectors listed in the Strategic Investment Priority Plan (SIPP).

Data showed that of these projects, 49 big-ticket tax incentive applications with a combined investment capital of P817 billion were approved by the Fiscal Incentives Review Board (FIRB), while the remaining 861 projects, representing an investment capital of P203 billion, were registered with different investment promotion agencies (IPAs).

“These projects are expected to accumulate a committed employment count of around 99,400 jobs within its incentivized period, with the labor-intensive manufacturing sector having the highest number of approved projects among the priority sectors,” the DOF said.

“This underscores the employability of the country’s workforce in high-quality jobs that will contribute to long-term economic growth,” it said.

It said that with the Philippines poised toward economic transformation, the law continues to play a crucial role in positioning the country as a global investment hub.

“As CREATE establishes a performance-based, time-bound, targeted and transparent tax incentives regime in the country, incentivized projects or activities under the key structural tax reform are to achieve performance metrics to ensure that the grant of fiscal support to Registered Business Enterprises (RBEs) leads to higher economic returns,” the DOF said.

The law took effect in April 2021 and reduced the corporate income tax from 30 to 25 percent. For domestic companies with a taxable income of P5 million and below, and with total assets of not more than P100 million, their corporate income tax was cut from 30 to 20 percent.

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