Duterte calls on lawmakers to fast-track passage of corporate tax reform bill

MANILA - President Rodrigo Duterte called on lawmakers to “fast-track the passage” of a bill seeking to lower corporate income taxes and rationalize fiscal incentives during his fifth State of the Nation Address on Monday.

Duterte said the measure was needed to “facilitate the country’s economic recovery.”

“This immediately cuts the corporate income levy from the current 30 to 25 percent and give [sic] government flexibility to grant a combination of fiscal and non-fiscal incentives among others,” Duterte said.

The proposed measure, called the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) was formerly known as CITIRA or the Corporate Income Tax and Incentives Reform Act.

Besides immediately slashing the corporate income tax (CIT), the bill also provides for the CIT to be reduced by 1 percentage point per year starting 2023 until it reaches 20 percent by 2027, Finance Secretary Carlos Dominguez earlier said.

Dominguez has referred to the CREATE bill as a stimulus measure.

While its predecessor CITIRA had been opposed by various business groups for supposedly removing fiscal incentives for exporters and foreign investors, the CREATE bill garnered support from these same groups as it lengthens the sunset period for fiscal incentives.