Fitch Solutions is optimistic the Corporate Recovery and Tax Incentives for Enterprises Act will help boost the Philippines’ economic recovery, citing its impact on investors’ sentiment.
The CREATE Act, signed into law on March 26, gradually lowers corporate income tax from 30 percent to 25 percent for big businesses and to 20 percent for small and medium enterprises.
In a commentary dated June 10, the unit of Fitch Group said, “The removal of the tax uncertainty should prove a boost to foreign investor sentiment towards the Philippines and help the recovery in foreign direct investment inflows, which fell 24.6 percent in 2020.”
It said the CREATE Act will put the Philippines’ corporate income tax level at par with other countries in the region such as Malaysia, at 24 percent; Indonesia, at 22 percent; and Thailand and Vietnam, both at 20 percent.
It, however, noted the need for other measures to boost investors’ sentiment.