The country’s biggest business group appealed to the government to extend the implementation of the lower tax cuts under the Corporate Recovery and Tax Incentives for Enterprises Law until the end of the year as businesses have yet to fully recover from the onslaught of the COVID-19 pandemic.
Philippine Chamber of Commerce and Industry president Gorge Barcelon said that majority of the enterprises in the last two years were unable to fully enjoy the tax cut since most of them were in strict quarantine and could hardly do actual business.
“I know there’s a deadline set but when you think about it during the last two years of the pandemic, companies have not really been able to take advantage of it. I hope that the government will consider extending it, hopefully within the end of the year so that we can start for the new year,” Barcelon said.
He said most of the companies’ sales dropped while others closed shop, some had to shell out extra expenses, such as providing transportation to its workers.
“The feedback that I had been getting was that the one and a half years when the law became effective, it was not taken advantage of and those deductions have not been maximized,” Barcelon said.
He said the Philippines lags behind its ASEAN neighbors when it comes to lowering the CIT, which is necessary if the government wants to attract foreign investors.
Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises Law lowered the CIT and modernized the country’s tax incentive.
Under the CREATE Law, the 3 percentage tax was lowered to 1 percent from July 1, 2020 to July 1, 2023. It also lowered the CIT to one percent effective July 1,2020 to June 30, 2023.
