By ONLINE BALITA NEWS
Finance Secretary Ralph G. Recto has assured Japanese investors that the ongoing amendments to the country’s fiscal incentives system will address their key concerns, giving birth to more thriving economic corridors in every corner of the Philippines–starting with the Luzon Economic Corridor.
“CREATE MORE [Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy] enhances both fiscal and non-fiscal incentives while addressing key concerns of Japanese investors,” he said in his keynote speech at the Philippine Economic Briefing (PEB) in Tokyo on June 21, 2024.
The CREATE MORE is an improved version of the CREATE law that expands and refines fiscal and non-fiscal incentives; clarifies the rules and policies on the grant and administration of incentives; and addresses key issues affecting the country’s investment climate.
It solves Japanese investors’ long-standing concern about value-added tax (VAT) refunds by exempting export-oriented enterprises from paying the latter.
Meanwhile, the VAT refund reforms under the CREATE MORE will also address investors’ concerns regarding the unreliability of the system, making it timely, efficient, and predictable.
With an enhanced VAT refund mechanism, existing and potential investors are assured of maximum enjoyment of VAT zero-rating incentives granted under the Tax Code, as amended by the CREATE Act.
The bill also provides a more attractive incentive package for registered projects or activities with an investment capital exceeding about PHP 15 billion.
The doubling of the additional power expense deduction will also help mitigate the impact of high power costs and reduce the overall cost of doing business in the Philippines, given its income tax effect.
The Finance chief underscored that CREATE MORE will bolster the country’s investment attractiveness, enticing more Japanese investors to establish roots and expand in the Luzon Economic Corridor.
The economic corridor is the first of its kind in the Indo-Pacific region and was established during the inaugural Trilateral United States-Japan-Philippines Leaders Meeting last April.
Aside from massive infrastructure investments that the Japanese investors can participate in, Recto said the corridor is a perfect hub for those involved in cutting-edge manufacturing, semiconductor supply chains, and agribusiness as this links Luzon’s major economic centers—Subic Bay in Zambales, Clark in Pampanga, Manila, and Batangas.
On top of this, the Philippine government has been actively addressing bottlenecks and streamlining processes to make it easier for Japanese investors to engage in high-priority sectors such as clean energy, mining, critical minerals, retail, digital technologies, and many others.
The Public-Private Partnership (PPP) Code offers a stable, predictable, and competitive environment for PPPs to flourish, easing Japanese investors’ participation in the 185 flagship infrastructure projects under the Build Better More program.
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