On June 25, 2025, the Tax Management Association of the Philippines (TMAP) held its June Tax Seminar at the Makati Diamond Residences, drawing in a full house of tax professionals, business leaders, and legal experts for an insightful afternoon focused on pressing tax and investment topics.
One of the most relevant discussions? A deep dive into the Philippine Economic Zone Authority (PEZA) incentives under Republic Act No. 12066—better known as the CREATE MORE Act.
PEZA and CREATE MORE: Rewriting the Incentive Playbook
Leading the session was Atty. Ross Vincent S. Sy, Group Manager of PEZA’s Enterprise Regulation and Support Services. With clarity and strategic insight, he unpacked how CREATE MORE reshapes the tax incentive landscape for both export-oriented and domestic market enterprises.
The bottom line? The Philippines is doubling down on making itself globally competitive, and PEZA is front and center in this push.
What is PEZA?
Established through RA 7916 or the Special Economic Zone Act of 1995, PEZA is the agency tasked with managing and promoting investments in public and private economic zones nationwide. Its mandate: attract capital, create jobs, grow exports, and drive countryside development.
Under CREATE MORE, PEZA’s role as an Investment Promotion Agency (IPA) becomes even more important—now with expanded tools to attract high-impact, high-value projects.
CREATE MORE at a Glance
CREATE MORE—short for Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy—was signed into law on November 11, 2024 and took effect on November 28, 2024. It builds on the original CREATE Act (RA 11534) and gives both foreign and domestic investors more flexibility, better incentives, and longer timelines for tax relief.
PEZA Incentives Under CREATE MORE: Key Highlights
Who Can Qualify?
Registered Business Enterprises (RBEs) endorsed by PEZA and other IPAs—this includes:
- Export enterprises (REEs)
- Domestic market enterprises (DMEs)
Especially those with high-value impact (≥ ₱15 billion in investments or ≥ USD 100 million in export value).
Tax Incentive Packages
Income Tax Holiday (ITH):
- Up to 7 years depending on location and project classification.
Post-ITH Options: - 5% Special Corporate Income Tax (SCIT) in lieu of all local and national taxes
- Enhanced Deductions Regime (EDR) with 20% corporate tax (down from 25%) + higher deductibility
Longer Lifespan for Incentives
- Under CREATE: max of 17 years
- Under CREATE MORE: up to 27 years for FIRB-approved projects (10-year extension applies)
Expanded Deductibles
- 100% power cost deductibility (up from 50%)
- 50% deduction on tourism-related expenses
- NOLCO (Net Operating Loss Carry-Over) extended for 5 years post-ITH
VAT & Customs Relief
- 0% VAT on local purchases and duty/VAT exemptions on imports
- Expanded VAT zero-rating for directly attributable services like janitorial, consultancy, admin, etc.
- High-value DMEs can now access similar perks previously exclusive to exporters
Simplified Local Taxation
- LGUs may impose a fixed 2% RBE Local Tax (RBELT) in place of multiple local levies—simplifying compliance
Non-Fiscal Perks & Compliance Enhancements
- Pre-registration import exemptions allowed with bond posting
- 50% remote workforce permitted for PEZA locators
- Streamlined VAT refunds via electronic portals
- Upcoming one-stop investor centers from DOF/BIR for faster resolution
What This Means for Businesses
The CREATE MORE Act is more than just a tax reform—it’s a full system upgrade. It gives enterprises more choices, longer incentive periods, and greater administrative ease. Whether you’re in manufacturing, IT-BPM, green energy, or domestic industries with large-scale investments, the landscape just got a lot more favorable.
With up to 27 years of tax perks, broader VAT relief, and smarter compliance rules, PEZA-registered enterprises are now positioned to thrive in a more competitive, investor-friendly environment.
Final Word:
For investors and tax professionals navigating the Philippine incentives ecosystem, PEZA under CREATE MORE is a game-changer. And if there’s one thing that came through clearly in the TMAP session—it’s this: strategic execution starts with understanding the new rules.
DISCLAIMER: This article is developed by subject matter experts at Babylon2k. This is for general information only and does not constitute expert advice. It is based on current regulations and may not account for all related topics. Any tax or compliance guidance provided cannot be used to avoid penalties or promote specific actions. Laws and interpretations may change over time, which could affect the accuracy of this report. We are not obligated to update this advisory if new regulations arise.
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