February 28, 2024

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CREATE Law Prioritises New Digital Tech Investments in the Philippines

In a move that could hasten the country’s digital transformation, the Philippine government has created the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law which gives generous fiscal incentives for investments in new digital technologies.

The move has been recently confirmed by the Department of Trade and Industry (DTI) Undersecretary Rafaelita Aldaba speaking at a forum of the European Chamber of Commerce of the Philippines (ECCP). She disclosed that the CREATE Law is aligned with the agency’s industrial policy by promoting investments that will push for a fourth industrial revolution.

The Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) provides support measures for innovative projects that companies could access as they implement their industrial transformation plans.

– Rafaelita Aldaba, DTI Undersecretary

 Moreover, Aldaba pointed out that new tech investments are given top priority by the government. Under the CREATE Law, Tier 3 activities are given:

  • the longest period for Income Tax Holiday (ITH)
  • Special Corporate Income Tax (SCIT) of 5 per cent for export enterprises
  • and enhanced deductions.

Further, she explained what categorises Tier 3 investments. These include:

  • Industries adopting advanced digital production technologies of the fourth industrial revolution
  • Industries producing equipment, parts, and services that embed new technologies
  • Industries engaging in research and development (R&D) activities and commercialisation of R&D that leads to accelerate innovation and “increase the added value on products and services.”

These include investments in robotics, industrial biotechnology, additive manufacturing, photonics, advanced materials, nanotechnologies, advanced manufacturing, Artificial Intelligence (AI), mobility, blockchain, cybersecurity, satellite technology, big data, Internet of Things (IoT), augmented and virtual reality, micro and nanoelectronics, and cognitive technology.

The benefits in looking into emerging technology run a-plenty. For example, export enterprises that will invest in Tier 3 investments within Metro Manila are qualified for six years of ITH and seven years for investments outside Metro Manila, and another 10 years of enhanced deductions and SCIT.

But it’s not just the exporters, local businesses can also make the most of the CREATE Law For domestic market activities, the government provides six years of ITH for investments in the National Capital Region (NCR) and seven years for investments outside NCR, and five more years for enhanced deductions and SCIT.

Aldaba stressed the importance of new technology in today’s world. To do that requires a paradigm shift. She cited AI, for instance, as not here to destroy jobs or replace humans but to create new jobs and change what work looks like, augment human intelligence and skills and make our workplaces safer.

While she revealed that the reality is that micro-industries have the least technology utilisation scores, the paradigm shift should happen even for the smallest of businesses. Small and medium enterprises (SMEs) should utilise new technologies to better their operation.

The Philippines is increasingly moving towards greater digital transformation. This recent move attests to that. And time and again, the Southeast Asian nation has relied on technology to move its economy forward. As reported on OpenGov Asia, Manila sought the partnership of the biggest names in technology today to facilitate a successful, clean and honest national election this coming 9 May.

Though there are still a lot of things to do for the country to adopt digital technology, the CREATE Law should provide a timely spark to set off positive change for every Filipino.

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Qlik’s vision is a data-literate world, where everyone can use data and analytics to improve decision-making and solve their most challenging problems. A private company, Qlik offers real-time data integration and analytics solutions, powered by Qlik Cloud, to close the gaps between data, insights and action. By transforming data into Active Intelligence, businesses can drive better decisions, improve revenue and profitability, and optimize customer relationships. Qlik serves more than 38,000 active customers in over 100 countries.

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CTC Global Singapore, a premier end-to-end IT solutions provider, is a fully owned subsidiary of ITOCHU Techno-Solutions Corporation (CTC) and ITOCHU Corporation.

Since 1972, CTC has established itself as one of the country’s top IT solutions providers. With 50 years of experience, headed by an experienced management team and staffed by over 200 qualified IT professionals, we support organizations with integrated IT solutions expertise in Autonomous IT, Cyber Security, Digital Transformation, Enterprise Cloud Infrastructure, Workplace Modernization and Professional Services.

Well-known for our strengths in system integration and consultation, CTC Global proves to be the preferred IT outsourcing destination for organizations all over Singapore today.

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Planview has one mission: to build the future of connected work. Our solutions enable organizations to connect the business from ideas to impact, empowering companies to accelerate the achievement of what matters most. Planview’s full spectrum of Portfolio Management and Work Management solutions creates an organizational focus on the strategic outcomes that matter and empowers teams to deliver their best work, no matter how they work. The comprehensive Planview platform and enterprise success model enables customers to deliver innovative, competitive products, services, and customer experiences. Headquartered in Austin, Texas, with locations around the world, Planview has more than 1,300 employees supporting 4,500 customers and 2.6 million users worldwide. For more information, visit www.planview.com.

SUPPORTING ORGANISATION

SIRIM is a premier industrial research and technology organisation in Malaysia, wholly-owned by the Minister​ of Finance Incorporated. With over forty years of experience and expertise, SIRIM is mandated as the machinery for research and technology development, and the national champion of quality. SIRIM has always played a major role in the development of the country’s private sector. By tapping into our expertise and knowledge base, we focus on developing new technologies and improvements in the manufacturing, technology and services sectors. We nurture Small Medium Enterprises (SME) growth with solutions for technology penetration and upgrading, making it an ideal technology partner for SMEs.

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HashiCorp provides infrastructure automation software for multi-cloud environments, enabling enterprises to unlock a common cloud operating model to provision, secure, connect, and run any application on any infrastructure. HashiCorp tools allow organizations to deliver applications faster by helping enterprises transition from manual processes and ITIL practices to self-service automation and DevOps practices. 

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IBM is a leading global hybrid cloud and AI, and business services provider. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Nearly 3,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and business services deliver open and flexible options to our clients. All of this is backed by IBM’s legendary commitment to trust, transparency, responsibility, inclusivity and service.

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