Congress On Course to Pass Priority Laws by June 2024

On March 19, during the full Legislative-Executive Development Advisory Council (LEDAC) meeting, House Speaker Martin Romualdez reported that the House of Representatives passed 19 priority measures ahead of the June 2024 target. Among these measures are the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE More) and the Value Added Tax (VAT) on Digital Services. The CREATE More Act amends the 2021 CREATE Law by reducing in corporate income tax (CIT) to 20%, continuing tax exemptions for certain companies, granting Motu Proprio power to the President for incentive packages, reduces the creditable withholding tax rate on income payments from one percent (1%) to one-half percent (1/2%), and allowing tax perks under more flexible working arrangements for IT-BPM enterprises within special ecozones, among others. Currently, of six ASEAN nations, the Philippines possesses the highest CIT rate at 25%, surpassing Malaysia (24%), Indonesia (22%), Vietnam (20%), Thailand (20%), and Singapore (17%). On the other hand, the proposed VAT on Digital Services would impose a 12% VAT on digital services consumed in the Philippines. 
 
In the same meeting, Senate President Juan Miguel Zubiri likewise committed to passing all the administration’s priority measures by June this year, with the majority to be approved before the sine die adjournment scheduled for May 25.
 
As of this writing a total of 14 priority measures that were included in the Common Legislative Agenda (CLA) of the LEDAC have been enacted into law – these include the Maharlika Investment Fund (July 2023), the Public-Private Partnership Code (December 2023), the Internet Transactions Act (December 2023) and the Ease of Paying Taxes (January 2024). There are currently 43 remaining bills that have yet to be passed into law. The full CLA list can be found here.