IBPAP SUPPORTS CREATE, OFFERS RECOMMENDATIONS

THE IT and Business Process Association of the Philippines (IBPAP) on Friday expressed its support for the proposed Corporate Recovery and Tax Incentives for Enterprises (Create) Act, but offered some recommendations that it hoped would be included in the measure.

“As we are currently facing the global economic fallout caused by Covid-19 (coronavirus disease 2019), what is now known as the Corporate Recovery and Tax Incentives for Enterprises

Act will be instrumental in jump- starting the Philippine economy and getting us on the road to recovery and growth,” IBPAP President and Chief Executive Officer Rey Untal said in a statement.

A repackaged version of the Corporate Income Tax and Incentives Reform Act (Citira), Create pushes for the reduction of the corporate income tax rate from the current 30 percent to 25 percent by July.

It also seeks to extend the applicability of the net operating loss carryover for losses incurred in 2020 from the current three years to five, allowing companies to deduct incurred losses from tax payments for a longer period.

According to Untal, these would help cushion the impact of the pandemic and reinvigorate businesses.

“During these uncertain times, it is doubly important for us to improve and highlight our competitiveness, so that we may also leverage off the shifting investment landscape and attract more foreign direct investments to the country,” Untal said.

IBPAP is encouraging Congress to convene, deliberate on and pass Create while taking into account certain “requests” from the industry.

One of these is to grant existing investors and locators with a fiveyear deferment of any change to current incentives to counterbalance the “serious uncertainties brought about by the health crisis and give them ample time to recoup losses.”

“After this much-needed deferment, we can then proceed with the sunset provisions,” Untal said.

The government, he added, should also encourage new investors and locators to set up shop and expand operations in the Philippines by offering a minimum of 10 years of incentives, and enable the country to compete with other nations.

The IBPAP chief said the Fiscal

Incentives Review Board should be allowed to have jurisdiction over very large investments — e.g. $1 billion and above — while investment promotion agencies can continue to cover anything below that.

The government should also keep the one-stop-shop nature of the Philippine Economic Zone Authority, he added, as it has “been an effective proponent of the country as a premier investment destination.”