CREATE IRR completed by next month

MANILA, Philippines — The newly reconstituted Fiscal Incentives Review Board (FIRB) is targeting to complete the implementing rules and regulations (IRR) of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) by the third week of May, according to the Department of Finance (DOF).

The IRR will contain details on the new tax incentives awaiting investors, as well as the expanded functions of the FIRB as the overseer of the grant of tax perks.

During the first meeting of the FIRB last April 14, the board agreed to set May 17 as the target date for signing the IRR on Title XIII of CREATE, which covers the expanded functions of the FIRB and the new menu of tax incentives.

Also discussed were the proposed set of industries qualified to get generous tax breaks in the Strategic Investment Priority Plan (SIPP).

The Secretaries of Finance and Trade as chair and co-chair are given 90 days from the effectivity of the law or until July 11 to promulgate the IRR of Title XIII.

The DOF had two initial discussions with the Bureau of Internal Revenue (BIR) and the Board of Investments (BOI) this week on the draft IRR.

A joint consultation by the DOF and the Department of Trade and Industry (DTI) with the various investment promotion agencies (IPAs) will be held on the last week of April to discuss the draft as well.

While the new SIIP under CREATE is being completed, it was agreed upon that the current 2020 Investment Priorities Plan (IPP) will be adopted as the transitional list of priority sectors qualified for tax incentives.

The 2020 IPP lists, among others, the following preferred areas and activities: all qualified activities relating to the fight against the COVID-19 pandemic; investment activities, subject to the determination by the BOI, supportive of programs to generate employment opportunities outside of congested urban areas;  all qualified manufacturing activities including agro-processing; agriculture, fishery, and forestry;  and strategic services, including integrated circuit design, creative industries, and maintenance, repair and overhaul of aircraft.

This IPP also includes healthcare and disaster risk reduction management services; mass housing; infrastructure and logistics; innovation drivers; inclusive business models; environment or climate change-related projects; energy; export activities; those covered by special laws and the list from the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).