The clock ran out on the Senate to approve a measure that will immediately reduce the corporate income tax to 25% from 30%, with Senators entering the adjournment promising to pass the legislation in August.
In a joint statement issued by the Senators late Thursday, the chamber said it will resume in July deliberations on the revised version of Senate Bill No. 1375, now known as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill.
“You also have our word that we will take up the bill upon the resumption of the session in July and work to pass it by the month of August,” they said.
The bill was among the chamber’s priorities along with the proposed Bayanihan 2 Act, which extends the special powers granted to President Rodrigo R. Duterte to address the coronavirus crisis.
The bill, however, failed to obtain Senate approval before Congress adjourned on June 5.
“We endeavored to pass CREATE with a mind for urgency,” the senators said.
“We regret, however, that we were unable to tackle this before the sine die adjournment… given the lack of material time, along with the pressing need to deliberate a plethora of other equally important national measures.”
The bill is the revised version of the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA). The new version accelerates the reduction in CIT to 25%.
This will further be reduced by 1 percentage point annually beginning 2023 until 2027. The CITIRA version of the bill proposed to gradually reduce the rate until it reaches 20% in 2029.
The new version will also extend the sunset period for enterprises enjoying incentives to four years from the 2-7 year period under CITIRA.
House Ways and Means Committee chair and Albay-2nd district Representative Jose Ma. Clemente S. Salceda has renewed his call for a special session to tackle CREATE as well as the proposed Accelerated Recovery and Investments Stimulus for the Economy bill, in light of the increasing job losses.
Mr. Salceda said the stimulus package is expected to generate 1.5 million jobs, while the proposed tax measure will create 1.1 million jobs over the next five years.
“We will also need to pass CREATE soon. I asked the President to call for a special session of Congress to get these bills passed, and I reiterate that request,” he said in a statement.
Finance Secretary Carlos G. Dominguez III and Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua are both considering recommending a special session to tackle COVID-19 measures.
“We are in discussions with the Office of the President,” Mr. Dominguez told reporters in a phone message Friday.
Mr. Chua said the economic team will seek guidance from the President as it prepares its recommendations on the stimulus package. — Charmaine A. Tadalan