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By Mon Abrea
The legislation of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) signifies yet another milestone in the Philippines’ continuous endeavor to upgrade its tax framework, enhance its attractiveness to investors, and align with international benchmarks. Building on the foundational reforms initiated through CREATE, this new law not only rationalizes incentives and enhances transparency but also directly addresses the primary concerns of foreign investors and multinational corporations (MNCs).
During our series of international roadshows last year — spanning over 15 nations and engaging hundreds of business leaders, diplomatic missions, and commerce chambers — two recurring themes surfaced: the necessity for improved taxpayer assistance for registered business enterprises (RBEs) and the pressing resolution of VAT refund challenges. CREATE MORE responds to these issues, thanks to the collective insights of our global partners.
As a part of this ongoing initiative, the Asian Consulting Group (ACG) actively partners with key government entities, particularly the Senate Ways and Means Committee and the Senate Tax Study and Research Office, to formulate responsive and strategic tax policy reform. The success of the roadshow was facilitated by the robust support of the Department of Trade and Industry (DTI), Board of Investments (BoI), Philippine Economic Zone Authority (PEZA), and Philippine Trade and Investment Centers (PTIC) throughout Asia, Oceania, the Middle East, Europe, the United States, and Canada, along with our Philippine Embassies and Consulate General Offices. It was also propelled by collaborations with foreign chambers and prominent business organizations in Manila and globally. This unprecedented cooperation illustrates the Philippines’ united commitment to boosting investor trust and fostering a globally competitive tax landscape.
- Establishment of the RBE Taxpayer Service
One of the most appreciated aspects of CREATE MORE is the establishment of a dedicated RBE Taxpayer Service. For years, foreign investors and locators in Philippine economic zones expressed their dissatisfaction over inconsistencies in tax administration, delays in rulings, and absence of a centralized coordination point with the BIR.
The RBE Taxpayer Service serves as a direct reaction to this issue. It creates a specialized branch within the Bureau of Internal Revenue (BIR) designated specifically to manage the tax-related requirements of registered business enterprises, especially regarding their filing and payment obligations. This service will:
- Offer streamlined assistance and guidance for conforming to tax and incentive regulations;
- Facilitate swift resolution of interpretive or procedural challenges;
- Ensure uniform application of laws and policies throughout all regional BIR offices;
- Enhance collaboration with investment promotion agencies (IPAs) to minimize bureaucratic obstacles and regulatory uncertainty.
This initiative guarantees that investors who contribute capital, innovation, and employment to the nation are regarded as allies in economic growth, not as opponents within a convoluted bureaucracy.
- Creation of a VAT Refund Center
Another significant advancement under CREATE MORE is the establishment of a centralized VAT Refund Center within the BIR and Bureau of Customs (BOC) that will manage the electronic processing and disbursement of cash refunds for creditable input VAT. This tackles the issues of delayed, denied, or excessively burdensome VAT refund procedures, which have long been identified by foreign chambers and businesses as a deterrent to investing in the Philippines. This was one of the most frequently raised issues during our 2024 international engagements.
The VAT Refund Center intends to:
- Consolidate and expedite the processing of VAT refund applications, particularly for REEs and RBEs;
- Commit to a strict 90-day processing period, with accountability measures to avoid unwarranted delays;
- Guarantee clarity and automation in claim tracking, lessening discretionary powers and opportunities for corruption.
This reform positions the Philippines nearer to global best practices, where a functional VAT refund system is standard. It also enhances cash flow for exporters and MNCs, allowing them to reinvest more effectively into operations and job generation.
A Responsive, Investor-Centered Reform
CREATE MORE embodies more than merely a tax initiative. It reflects the Philippine government’s attentiveness to the business community, particularly foreign investors, who have maintained confidence in the country’s potential despite global challenges.
As we persist in advocating for good governance and global competitiveness, we must heed the voices of stakeholders on the ground. The incorporation of the RBE Taxpayer Service and VAT Refund Center in CREATE MORE showcases that meaningful reform materializes when dialogue, data, and direction converge.
For investors aiming to establish business operations in the Philippines, this is a powerful message: We are listening, and we are cultivating a more favorable investment environment — with you as collaborators.
If you have tax concerns in the Philippines, CONSULT ACG — email us at consult@acg.ph or visit www.acg.ph for additional tax updates. You may also follow ACG on LinkedIn and social media: @consult.acg!
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Mon Abrea, CPA, MBA, MPA, is the Chief Tax Advisor of the Asian Consulting Group (ACG) and the Philippines’ foremost proponent of genuine tax reform. A Harvard graduate who also completed an executive program on Climate Policy at Oxford, he advises governments, multinational corporations, and global institutions on tax policy, governance, and sustainable investments. He has delivered investment and tax briefings in over 50 countries and states across Asia, North America, Europe, Australia, and the Middle East. He also hosts the podcast Thought Leaders and Game Changers, where he converses with global experts on taxation, sustainability, and innovation. Follow him: @askthetaxwhiz.
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