If you’re in the tourism, manufacturing, or BPO industry, now is the best time to expand your business in the Philippines. The CREATE MORE Act (Republic Act 12066), officially known as the Corporate Recovery and Tax Incentives for Enterprises – More Opportunities and Rationalization of Efficiency Act, is transforming investments in the country by offering lower taxes, better incentives, and easier access to business perks.
This law makes it easier for local and foreign investors to benefit from corporate tax holidays, VAT zero-rating, and duty-free importation. This makes it easier for businesses to save costs and grow faster.
Let’s explore how the CREATE MORE Act Philippines shapes different industries and why you should take advantage of it.
What Is the CREATE MORE Act (Republic Act 12066)?
The CREATE MORE Act is a Philippine tax reform law designed to attract more investors by offering simplified and competitive tax incentives. It builds upon the original CREATE Act (Republic Act 11534) and introduces more benefits for businesses looking to expand or relocate to the Philippines.
Key Benefits of the CREATE MORE Act
Here’s what businesses can enjoy under this law:
- Income Tax Holiday (ITH): Pay 0% corporate income tax for 4-7 years.
- 5% Special Corporate Income Tax (SCIT): Instead of the usual 25% corporate tax, qualifying businesses pay only 5% tax on gross income.
- Duty-Free Importation: No import taxes on capital equipment, raw materials, and technology.
- VAT Zero-Rating: Save on costs by removing VAT from local purchases.
- Enhanced Deductions: Extra tax perks on labor, R&D, power, and training expenses—plus a lower 20% income tax on net taxable income.
These incentives help businesses reduce costs, boost profits, and compete globally. But how do they apply to specific industries? Let’s break it down.
How the CREATE MORE Act Benefits Key Industries
1. Tourism & Hospitality Industry
The Philippines is a top travel destination, but businesses in hotels, resorts, and travel services need strong financial backing to compete. The CREATE MORE Act helps tourism businesses by offering:
- ITH for up to 7 years for new investments in hotels, resorts, and theme parks.
- Duty-free importation of high-end hotel equipment, eco-friendly transport, and digital booking systems.
- VAT zero-rating on local services, reducing operational costs.
- Enhanced tax deductions for hiring workers, staff training, and green energy usage.
With these benefits, luxury resorts, adventure parks, and eco-tourism projects can scale faster and attract more international visitors.
2. Manufacturing & Industrial Sector
Manufacturing is one of the biggest contributors to the Philippine economy, providing jobs and exports. With the CREATE MORE Act, industrial expansion becomes more profitable through:
- ITH for up to 7 years for new investments in export-oriented manufacturing and support industries.
- Tax-free importation of machinery, raw materials, and equipment for automotive, electronics, and food processing.
- 5% SCIT for qualifying businesses, reducing tax burdens and increasing reinvestment potential.
- Enhanced Deductions for R&D and workforce training—plus a lower 20% corporate income tax.
- VAT zero-rating on local purchases, strengthening the supply chain.
With many global brands shifting production away from China, the Philippines is positioning itself as a competitive alternative.
3. BPO & IT Services
The BPO industry is a key economic driver, employing over 1.3 million professionals. The CREATE MORE Act strengthens the Philippines’ outsourcing sector by:
- ITH for up to 7 years for new export-oriented IT-BPM investments.
- 5% SCIT, significantly lowering tax costs for outsourcing companies.
- 50% Work-From-Home (WFH) Incentives, allowing IT-BPM firms to retain tax perks even with remote work setups.
- VAT Zero-Rating for Local Services, cutting operational expenses for businesses outsourcing within the country.
These incentives help the Philippines remain a top outsourcing hub for AI, digital services, and technology-driven industries.
Why Investors Should Consider the CREATE MORE Act
By simplifying the registration, approval, and compliance process, the CREATE MORE Act offers:
- Easier access to tax incentives → Removes bureaucratic red tape.
- More competitive tax perks → Keeps the Philippines at par with ASEAN neighbors.
- Policy stability → Gives investors confidence in long-term planning.
For tourism, manufacturing, and BPO investors, this means lower costs, higher profitability, and more growth opportunities.
FAQs About the CREATE MORE Act
Q1: What is the CREATE MORE Act in the Philippines?
The CREATE MORE Act (Republic Act 12066) is a tax reform law that offers business-friendly incentives, including corporate tax holidays, VAT exemptions, and duty-free importation, to attract more local and foreign investors.
Q2: What are the tax incentives under the CREATE MORE Act?
The law provides up to 7 years of income tax holidays (ITH), a 5% special corporate income tax (SCIT), VAT zero-rating, duty-free importation, and enhanced deductions for qualified industries. More about Tax Incentives >
Q3: Who can benefit from the CREATE MORE Act?
Businesses in tourism, manufacturing, BPO, IT services, and export-oriented industries can benefit from the tax incentives.
Q4: How does the CREATE MORE Act affect foreign investors?
Foreign investors can reduce operational costs, import machinery and equipment tax-free, and enjoy tax holidays for new investments.
Q5: Where can I find the full text of the CREATE MORE Act?
You can access the full text of Republic Act 12066 through the official website of the Philippine Board of Investments (BOI) or the Department of Finance (DOF).
Final Thoughts: Take Advantage of the CREATE MORE Act Today
The CREATE MORE Act (Republic Act 12066) is a game-changer for investors looking to expand in the Philippines. With lower taxes, reduced costs, and more accessible incentives, now is the best time to seize new business opportunities.
RESOURCE
Interim IRR of CREATE MORE Act and Revenue Regulations No. 18-2024
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📌 SOURCE FOR THE IRR: https://firb.gov.ph/resources/create-more/
DISCLAIMER: This article is developed by B.E.T.H. AI, your partner in empowering smarter business decisions. 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.
Babylon2k’s B.E.T.H. can help you when you need more information and clarification on how the Republic Act 12066 affects your business. Learn More >
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