Peso may fall to 59, BSP to intervene
Other Relevant Tax Updates:
- TAX & BUSINESS-RELATED NEWS [NOVEMBER 13-19]
- HIGHLIGHTS OF THE RECENTLY PASSED CREATE MORE LAW
I. TAX & BUSINESS-RELATED NEW [NOVEMBER 13-19]
- Peso may fall to 59, BSP to intervene
- Customs ‘fixer’ Mark Taguba, 2 others convicted over drug import raps
- New wage hike in Western Visayas now in effect
- LBC reports net loss on higher interest expenses
- Eastern Visayas workers to get pay hike in December
- Cebu City offers 2-year tax break
- PEZA registers 3 new locators in Cebu, Makati, Batangas economic zones
- PH Hass Avocados now exported to Japan; 1st shipment sent from Mindanao—DA
- BARMM eyes halal industry’s big potential
- Apex profit soars as gold prices rally
- Palawan Group of Companies unveils Palawan Gold
- Bacoor Assembly of 1898 Act declares Aug. 1 a special working holiday
- Gen Z employees value ‘stable income, personal achievement’ — Ateneo study
- Primary Group of Builders partners with Banyan Group to manage Maayo Hotel under Homm brand
- Supercharge your home network with TP-Link’s WiFi 7
- Biden nominates Fil-Am leader to Millenium Challenge Corporation board
- Lawyer faces disbarment complaint over slap remark vs. First Lady Liza Marcos
- SEC orders takeover of Lopa’s Equitiworld
- SC: PhilHealth president can’t revoke accreditation of healthcare professionals
- Palace bares new appointees in DPWH, DOF
- Marcos signs law easing tax breaks for businesses, regulating work-from-home in ecozones
II. HIGHLIGHTS OF THE RECENTLY PASSED CREATE MORE LAW
SIGNIFICANT HIGHLIGHTS OF THE REPUBLIC ACT (R.A.) NO. 12066 OR THE CORPORATE RECOVERY & TAX INCENTIVES FOR ENTERPRISE TO MAXIMIZE OPPORTUNITIES FOR RE-INVEGORATING THE ECONOMY (CREATE MORE)
President Ferdinand Marcos Jr. signed the law on November 8, 2024. This Act aims to enhance and broaden tax incentives to boost economic recovery, support enterprises, and attract foreign investment.
Significant highlights of the law include the following implications
A. Income Tax Implications
- Reduces Corporate Income Tax Rate from 25% to 20% for Registered Business Enterprises (RBEs) under the Enhanced Deductions Regime (EDR).
- Expands the scope of income exempted from treaty obligations, including agreements entered into by the President with economies and administrative regions, subject to the concurrence of the Senate.
- Recognizes that input tax paid on local purchases attributable to VAT-exempt sales shall be deductible from the gross income of the taxpayer.
- Sets a cap on creditable withholding tax rates at not more than 15% for payments to individuals and corporations residing in the Philippines.
B. Value-Added Tax Implications
Expands the VAT zero-rating on purchases in relation to goods or services sold to export-oriented enterprises provided the following requisites are compiled:
1.1 The enterprises exports at least 70% of their annual production from the previous year; and
1.2 Sales are “directly attributable” to the export activity, as certified by the Export Marketing Bureau of the Department of Trade and Industry.
2. Provides VAT exemption on importation and VAT zero-rating on local purchases for goods and services “directly attributable” to the registered project or activity, including incidental expenses, of a registered export enterprise or High-Value Domestic Market Enterprises (DMEs), regardless of the location of these enterprises. High Value DMEs are registered domestic enterprises with an investment capital exceeding Php 15 Billion, and are engaged in import-substituting sectors, or with export sales in the immediately preceding year of at least US$ 100,000,000 or its equivalent in acceptable foreign currency, as may be increased by the Fiscal Incentives Review Board,
3. Adds the definition of “directly attributable” to refer to goods and services that are incidental to and reasonably necessary for the export activity of the export-oriented enterprise, including janitorial, security, financial, consultancy, marketing, promotion services, and services rendered for administrative operations such as human resources, legal, and accounting.
4. Clarifies that the sale of goods or services by a VAT-registered seller to a registered export enterprise is VAT zero-rated, regardless of location of said enterprise. Local sales of goods and services by RBEs, regardless of their income tax incentives regime and location, are generally subject to 12% VAT, unless otherwise exempt or zero-rated under specific provisions of the Tax code. The term “Local Sales” means sales to domestic market enterprises or non-RBEs, regardless of whether the sale is made within freeports or economic zones.
C. Tax Incentives Implications
- Expands the coverage of Enhanced Deductions Regime for export enterprise and DME to include the following:
1.1 100% additional deductions on power expense incurred in the taxable year
1.2 50% deductions for re-investment allowance to manufacturing and tourism industries in relation to its undistributed profit or surplus within a period of five (5) years from the time of such re-investment
1.3 50% additional deductions on expenses relating to exhibitions, trade missions, or trade fairs.
1.4 Enhance Net Operating Loss Carry-Over (NOLCO). The net operating loss of the registered project or activity during the first three (3) years from the start of commercial operation, which had not been previously offset as a deduction from gross income, may be carried over as a deduction from gross income within the next five (5) consecutive taxable years immediately following the last year of the Income Tax Holiday (ITH) entitlement period of the project.
2. On Local Business Tax
2.1 Introduces the Registered Business Enterprise Local Tax (RBELT) or not more than 2% of the gross income, which is in lieu of all local taxes, fees, and charges, for RBEs under the ITH and Enhanced Deduction Regime
2.2 Exempts RBEs under the 5% Special Corporate Income Tax (SCIT) Rate from all national and local taxes, local fees, and charges.
Provides longer incentive periods for qualified RBEs from a maximum of 17 years to a maximum of 27 years.
3.1 For FIRB-approved projects, additional ten (10) years of Special Corporate Income Tax (SCIT)/Enhanced Deduction
3.2 Allows DMEs to enjoy the same incentive periods as REEs.
3.3 Extends the previously-granted national and/or local tax incentives for existing RBE’s prior to CREATE Act (2021) until December 31, 2034 or an additional three (3) years from CREATE Act’s 10-year sunset clause.
3.4 Extends the period of availment of VAT and duty incentives to entire registration period as an RBE
4. Allows Work-From-Home Arrangement of up to 50% of the total workforce without adverse impact on incentives
D. Administrative Provisions
- Simplifies and increases transparency in the VAT and Excise Tax Refund Processes
- Creates the Registered Business Enterprise Taxpayers Service (RBETS) within the BIR to provide end-to-end tax compliance support to RBEs
- Requires IPAs to establish One-Stop Action Centers and initial point of contact to foreign investment leads to assist RBEs in setting up and conducting their businesses.
- Increases the IPAs’s investment capital approval threshold from Php 1 Billion to Php 15 Billion. Projects above Php 15 Billion require FIRB approval
Peso may fall to 59, BSP to intervene [Philippine Daily Inquirer, November 19, 2024]
A peso depreciation to record-low 59:$1 “looks likely” as the currency continued to be overpowered by a rallying dollar, although a deeper fall beyond that level is unlikely as the Bangko Sentral ng Pilipinas (BSP) stands ready to defend the local unit, Dutch financial giant ING Bank said.
https://business.inquirer.net/490818/peso-may-fall-to-59-bsp-to-intervene
Customs ‘fixer’ Mark Taguba, 2 others convicted over drug import raps [GMA News Online, November 19, 2024]
In its ruling, the RTC found that Taguba, Tatad, and Dong contributed, directly or indirectly, in importing illegal drugs into the country.
New wage hike in Western Visayas now in effect [Philippine Daily Inquirer, November 19, 2024]
The RTWPB has approved daily wage increases of P33 to P40 for workers in private establishments and P1,000 for domestic workers in Western Visayas.
https://newsinfo.inquirer.net/2006732/new-wage-hike-in-western-visayas-now-in-effect
LBC reports net loss on higher interest expenses [Philippine Daily Inquirer, November 19, 2024]
In a regulatory filing, the courier service provider reported its net loss amounted to P127.82 million, a turnaround from a P215.23-million net income in the same period last year.
https://business.inquirer.net/490822/lbc-reports-net-loss-on-higher-interest-expenses
Eastern Visayas workers to get pay hike in December pay [The Manila Times, November 18, 2024]
Labor Secretary Bienvenido Laguesma disclosed over the weekend that the RTWPB-8 issued Wage Order RB 8-24, granting a P30 daily minimum wage increase across all sectors.
Cebu City offers 2-year tax break [SunStar Cebu, November 18, 2024]
Mayor Raymond Alvin Garcia issued on Monday, Nov. 18, 2024, Executive Order (EO) 22 series of 2024, which grants tax amnesty on penalties, surcharges and interests for unpaid real property taxes, including unpaid special education fund, idle land tax and other special levy taxes in Cebu City.
https://www.sunstar.com.ph/cebu/cebu-city-offers-2-year-tax-break
PEZA registers 3 new locators in Cebu, Makati, Batangas economic zones [BusinessWorld, November 18, 2024]
In a statement on Monday, PEZA said that the new registered business enterprises are involved in sustainable energy, advanced manufacturing, and information technology (IT) services.
Quezon City is top NCR economic contributor in 2023 [The Philippine Star, November 17, 2024]
Data released by the PSA showed that QC accounted for more than 19 percent of the regional economy, with gross domestic product (GDP) valued at P1.27 trillion in 2023.
https://www.philstar.com/business/2024/11/17/2400689/quezon-city-top-ncr-economic-contributor-2023
PH Hass Avocados now exported to Japan; 1st shipment sent from Mindanao—DA [Manila Bulletin, November 17, 2024]
The DA said the export breakthrough was a result of the collaborative efforts of the Bureau of Plant Industry (BPI), the Office of the Agriculture Attaché in Tokyo, and Dole Stanfilco.
https://mb.com.ph/2024/10/30/ph-hass-avocados-now-exported-to-japan
BARMM eyes halal industry’s big potential [The Manila Times, November 17, 2024]
The strategic framework for a sustainable and competitive halal industry serves as a blueprint to align BARMM’s halal industry with the Brunei Indonesia Malaysia Philippines East Asean Growth Area (BIMP-EAGA), focusing on agro-industry and fisheries.
https://www.manilatimes.net/2024/11/17/regions/barmm-eyes-halal-industrys-big-potential/2005862
Apex profit soars as gold prices rally [The Philippine Star, November 17, 2024]
Razon-led Apex Mining Co. Inc. said its net income from January to September rose by a third to P3 billion as revenues soared, driven by higher ore milled and elevated gold prices.
https://qa.philstar.com/business/2024/11/17/2400682/apex-profit-soars-gold-prices-rally
Palawan Group of Companies unveils Palawan Gold [The Manila Times, November 15, 2024]
To make ownership even more achievable, Palawan Gold offers a unique “Bili-Sangla” payment option, allowing customers to start investing with just a 10% down payment. This feature helps Filipinos overcome traditional barriers to gold ownership, making financial security more accessible.
Bacoor Assembly of 1898 Act declares Aug. 1 a special working holiday [Manila Bulletin, November 15, 2024]
Historical documents reveal that on August 1, 1898, the Act of Independence written by Apolinario Mabini was signed by President Emilio Aguinaldo in Bacoor, along with around 200 elected municipal leaders from 16 liberated provinces.
https://mb.com.ph/2024/11/14/bacoor-assembly-of-1898-act-declares-aug-1-a-special-working-holiday
Gen Z employees value ‘stable income, personal achievement’ — Ateneo study [GMA News Online, November 15, 2024]
“They also want their work to have an impact on others and society. They want to see how their work contributes to the organization’s mission in general,” they added.
Primary Group of Builders partners with Banyan Group to manage Maayo Hotel under Homm brand [SunStar Cebu, November 15, 2024]
The Primary Group of Builders (PGB) signed into agreement on Nov. 9, 2024, with Singapore multinational hospitality brand Banyan Group to manage and operate its foray into hospitality, Maayo Hotel, under the esteemed HOMM brand, adding remarkable strength to the country’s journey of excellence in the hospitality industry.
Supercharge your home network with TP-Link’s WiFi 7 [Manila Bulletin, November 15, 2024]
Compared to traditional 2.4GHz and 5GHz bands, Wi-Fi 7’s new 6 GHz band offers significantly higher bandwidth and lower latency, resulting in less congestion. This delivers faster speeds, smoother streaming and less lag for demanding online activities such as gaming, video conferencing and streaming high-definition content.
https://mb.com.ph/2024/11/18/supercharge-your-home-network-with-tp-link-s-wi-fi-7
Biden nominates Fil-Am leader to Millenium Challenge Corporation board [Inquirer.Net, November 15, 2024]
Lewis is chair and CEO of TLC Beatrice, LLC, a family investment firm. A lawyer by profession, admitted to practice in the Philippines and New York, Lewis was the first Filipino woman to pass the New York bar without attending law school in the United States.
Lawyer faces disbarment complaint over slap remark vs. First Lady Liza Marcos [GMA News Online, November 15, 2024]
A Supreme Court official confirmed to GMA News Online Friday that lawyer and university professor Andre de Jesus filed a complaint against lawyer Glenn Chong on Wednesday.
SEC orders takeover of Lopa’s Equitiworld [Manila Standard, November 13, 2024]
The Securities and Exchange Commission (SEC) ordered the Capital Markets Integrity Corporation Corp. (CMIC) to take over the operations of Equitiworld Securities Inc. (EQWorld), a brokerage firm led by businessman Antonio Lopa, to protect its clients.
SC: PhilHealth president can’t revoke accreditation of healthcare professionals [GMA News Online, November 13, 2024]
In a 20-page decision, the SC First Division said it is clear that the powers to revoke an accreditation are exercised by the PhilHealth Board under Section 75 of the Revised Implementing Rules and Regulations (RIRR) of the National Health Insurance Act.
Palace bares new appointees in DPWH, DOF [GMA News Online, November 13, 2024]
The following are the latest presidential appointees as of Monday, November 11:
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