The anticipated passage of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act is already yielding positive results as Japanese companies commit to expanding their investments in the Philippines.
Senator Juan Miguel Zubiri, chairman of the Senate Committee on Economic Affairs, said the measure, designed to streamline the VAT-refund process for export-oriented industries, is poised to significantly boost the country’s investment landscape.
Zubiri expressed enthusiasm over the recent investment pledges from Japanese firms, which were confirmed during their meetings with the Department of Trade and Industry (DTI).
These commitments come in anticipation of the CREATE MORE Act, currently awaiting the President’s approval.
“The confidence shown by Japan’s business sector is a testament to the soundness of our economic reforms. This is precisely the outcome we aimed for with CREATE MORE,” Zubiri remarked.
As author and co-sponsor of the bill, he has been a strong driving force behind its passage.
Among the companies signalling their intention to expand their investments in the Philippines are MinebeaMitsumi Inc., Marubeni Corp., AEON Retail Co. Ltd., Japan Institute of Design and Promotion, and Itochu Corp., the parent company of DOLE Philippines.
Zubiri noted that DOLE has faced significant challenges under the current VAT refund system, with losses exceeding P3.5 billion due to delayed or denied refunds since 2018.
“Foreign investors like DOLE have been grappling with an overly complex VAT refund process, and some were even considering relocating to more business-friendly countries in the region,” Zubiri explained.
“Addressing these concerns was a priority for us in crafting CREATE MORE. It’s crucial that we don’t undermine our participation in major free trade agreements by making it difficult for investors to operate here. If we don’t fix this, they will inevitably leave,” he added.
The CREATE MORE Act is designed to provide clarity and efficiency in tax-related processes, with clear timelines for VAT refunds and approvals from the Fiscal Incentives Review Board.
It also ensures that export-oriented enterprises are exempt from VAT on domestically purchased materials and services that are directly attributable in their production.
“I am confident that with the passage of CREATE MORE, we will see even more investors, following the lead of these Japanese companies, choosing the Philippines as their destination for growth,” Zubiri said.
He said this legislative development represents a pivotal moment for the country’s economic recovery, as it promises to enhance the ease of doing business, attract foreign investments, and invigorate the export industry.
