THE Department of Finance (DoF) expressed the hope that the proposed Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) is passed sometime this month, before Congress takes a month-long break in mid-October, Finance Assistant Secretary and the department’s spokesman, Assistant Secretary Antonio G. Lambino II, said.
“We hope CREATE will be passed this month,” he said in a Viber message Friday, adding that other recovery bills are also making progress: “FIST hearings have already started in the Senate. We hope GUIDE (Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery bill) will follow suit.”
CREATE has been repurposed as a recovery program because it seeks to lower corporate income tax this year to 25% from 30% currently and reform the fiscal incentive system.
The five-percentage-point rate cut is expected to cost the government P42 billion this year and P625 billion in the next five years as the tax rate is trimmed gradually to 20% by 2027.
The bill is currently pending in the Senate. A previous version of the bill, the Corporate Income Tax and Incentives Rationalization Act (CITIRA) bill, was passed by the House of Representatives last year.
In a text message Friday, Senate President Vicente C. Sotto III has committed to pass the bill “hopefully before the October suspension.”
The office of the Senate Ways and Means Committee was asked for comment but had not responded at deadline time.
The 18th Congress will suspend session on Oct. 16 for a month-long break, according to House Concurrent Resolution No. 11. It will resume on Nov. 16 up to Dec. 18, before adjournment on Dec. 19.
“The swift enactment of CREATE, FIST, GUIDE and the 2021 budget will serve to accelerate our economic recovery. We should not delay providing urgent and necessary relief to our people,” said Finance Secretary Carlos G. Dominguez III on Friday in a budget hearing at the House of Representatives.
The FIST bill aims to set up asset management companies through which banks can dispose of their bad loans and non-performing assets, which are expected to increase due to the coronavirus disease 2019 (COVID-19) pandemic’s impact on the economy.
GUIDE seeks to allow government-owned banks to establish special holding companies that will inject equity into companies hit hard by the pandemic.
“We are committed to working closely with you on the recovery measures so that these can be enacted in a timely, decisive, and responsible manner,” Mr. Dominguez added. — Beatrice M. Laforga