THE Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business organization, is appealing to the government to extend the validity of the COVID-19 pandemic tax relief measures until the end of the year as enterprises are yet to fully recover from the economic impact during the peak of the health crisis.
PCCI president Gorge Barcelon said that the majority of businesses in the last two years, at the height of the pandemic, were unable to fully enjoy the tax cuts since most of them were in strict quarantine and could hardly do actual business.
Specifically, the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, passed into law in March 2021, provided tax cuts for businesses as they struggled during the peak of the pandemic in 2020.
Among the tax relief measures was the granting of a one percent percentage tax for non-value added tax (VAT) taxpayers until June 30, 2023. It reverted to its original rate of three percent effective July 1.
Likewise, the minimum corporate income tax will go back to two percent from one percent, while the tax for non-profit and proprietary educational institutions and hospitals will also revert to its original 10 percent rate from one percent.
“I know there’s a deadline set but when you think about it during the last two years of the pandemic, companies have not really been able to take advantage of it. I hope that the government (Bureau of Internal Revenue) will consider extending it, hopefully within the end of the year so that we can start for the new year,” Barcelon said.
The PCCI chief said that in the last two years, most of the companies have seen their sales dropping, “while others were even unlucky to survive and some had extra expenses, for instance, providing transportation for workers to work.”
“The feedback that I had been getting was that in the one and a half years when the law became effective, it was not taken advantage of and those deductions have not been maximized,” Barcelon said.
Apart from the tax reliefs, the CREATE law lowered the corporate income tax (CIT) and rationalized fiscal incentives.
It reduced the CIT to 25 percent from 30 percent effective July 1, 2021, followed by a one-percentage- point cut annually from 2023 until it reaches 20 percent in 2027.
For local small companies, an outright reduction to 20 percent was implemented. (GMA Integrated News)
