The Lower House and Senate submitted last February 3 to Malacañang the Corporate Recovery and Tax Incentives for Enterprises (Create) Bill. This bill will reduce the corporate tax rates from 30% to 25% for big corporations, and up to 20% for small and medium enterprises. This aims to ensure bigger profits for capitalists under the guise of reviving the economy.
The bill languished in Congress for several years as TRAIN 2, TRABAHO and CITIRA. It was renamed Create to conjure an illusion that foreign investments will “create” opportunities for economic recovery from crisis and pandemic.
Create also empowers the National Economic Development Authority (NEDA) to arbitrarily provide incentives and tax exemptions to big companies. It authorizes NEDA to give a 17-year tax exemption to export operations of those bourgeois compradors it will categorize as “critical.” Furthermore, NEDA can grant 12-year tax exemptions to enterprises with a minimum investment of ₱500 million.
Contrary to the regime’s claims, smaller enterprises which suffered operation stoppages and huge income cuts during the pandemic will benefit the least from this tax measure. Gains will largely accrue to multinationals and big bourgeois comprador companies which rake in billions of profits in their operations in the country.
Create will also weaken the financial capacity of the state by narrowing down the tax base. Currently, corporate taxes serve as the biggest source of government revenue, 75% of which are levied on big corporations. As in the past, the people will be made to shoulder the revenue losses from this measure in the form of additional and higher consumption taxes.
Conservative estimates by the regime indicate that the state will lose at least ₱251 billion in revenues within two years should the scheme be passed. This fund could be used for aid and other programs that could directly stimulate the economy.
Create also has anomalous provisions that provide tax exemptions to local oil refineries as well as socialized and low-cost housing. Currently, Petron Corp., a subsidiary of Ramon Ang’s San Miguel Corp., is the only company which refines oil in the country. The local housing sector, on the other hand, is dominated by the Villar family.
Create has small and token provisions which seek to give tax exemptions for the sale and importation of Covid-19 vaccines and other medical equipment until 2023; as well as for medicines for kidney diseases, cancer and tuberculosis.
According to Ibon Foundation, the distribution of adequate aid, and not Create, will stimulate the economy that was devastated by the pandemic and lockdown. It suggested to allocate ₱540 billion to aid the poorest 18 million families in a span of three months or ₱10,000 monthly per family. Thus, the ₱420-billion aid dubbed as the Bayanihan 3 which was filed by 220 legislators last February 16 is insufficient to aid Filipino families. The ₱52-billion minimum subsidy proposed by the Department of Labor and Employment to aid 2-3 million workers of small and medium-scale enterprises is similarly insufficient. The said proposals were filed because the regime did not allot a single centavo for pandemic aid programs in the 2021 national budget.