CREATE to generate 1.4 million new jobs – lawmaker

About 1.4 million new jobs will be generated in the next 10 years because of a newly enacted tax law designed to help pandemic-hit micro, small and medium enterprises (MSMEs) with P133 billion in much-needed stimulus funds.

In his remarks at a recent digital briefing, Albay Rep. Joey Salceda broke down the benefits of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law.

“Based on a standard net present valuation of the cut in corporate income tax alone, the value is P7.1 trillion. We expect CREATE to yield 1.1 to 1.4 million jobs over the next decade,” Salceda said.

The chairman of the House ways and means committee gave his prediction before top business executives with the tax committee of the Financial Executives Institute of the Philippines (FINEX).

“CREATE is the largest infusion of tax savings in the private sector in the country’s modern history,” he said.

Salceda urged the Bureau of Internal Revenue (BIR) to “expedite rules” on income tax filing and change withholding tax rules in view of the new tax reform law.

He proposed that BIR rules on venues should also be changed to “ease filing” and for them to “review withholding regulations” as well.

“The venue restrictions are the most irrational part of the BIR tax regulations. It’s also the hardest to navigate, especially given the pandemic,” he complained, especially in light of the extended lockdown on the looming April 15 deadline.

“I don’t think we can extend the deadline. We need the money, especially given the plan for a SAP (social amelioration program) 3. But there are other adjustments we can make,” Salceda suggested.

For his part, Camarines Sur Rep. LRay Villafuerte revealed that CREATE is also expected to resuscitate MSMEs by way of P133 billion in stimulus funds, even if this means losses in the form of foregone taxes on the part of the national government.

“The measure is estimated to incur P133 billion in revenue losses to the government in the first year of CREATE’s implementation. But this is no cause for concern as this will translate into the biggest stimulus ever for businesses,” he pointed out.

And this, according to him, will “help them retain or expand their operations, create more jobs and assist the government in its efforts to nurse the economy back to health amid this lingering pandemic.”

He noted that the key provisions lowering the corporate income tax rate from 30 to 20 percent for MSMEs (which account for 99 percent of businesses, and the redesigned incentives system for investors) will aid the private sector in recovering from the global recession.

Villafuerte said CREATE will also extend a lifeline to heavily hit MSMEs and other businesses that expect their revenues to plunge by as much as 70 percent over the next two weeks as the so-called National Capital Region (NCR) Plus bubble extends its lockdown by another week.

NCR Plus includes Metro Manila and its adjoining provinces of Bulacan, Rizal, Laguna and Cavite.

He said the P133-billion stimulus fund for businesses under CREATE will “complement” the ongoing recovery measures that the government is implementing under the Bayanihan 2 to assist pandemic-hit sectors.