The CREATE Act (Republic Act No. 11534), enacted on 3 February 2021, initiated to reduce tax uncertainty and aid COVID-19 hit enterprises, saw the Philippines' FDI reach a record high before falling due to global economic shifts and US rate hikes. Despite these efforts, uncertainties in VAT and tax provisions, alongside unutilized key reform features like the customizable tax incentives, have negatively impacted investor confidence and business operations.

In the 19th Congress, proposals to address these was introduced under House Bill No. 8968 which include simplifying VAT refunds, adjusting tax rates, and clarifying VAT regimes. Further, enabling work-from-home schemes for BPOs and refining presidential powers to grant incentives are on the agenda to foster a more attractive investment environment.

In our upcoming committee meeting, we will discuss the CREATE Act's impact and challenges since its 2021 enactment. The Act aimed to provide tax relief and modernize incentives, initially boosting foreign investment despite global health crises. However, investor sentiment has been affected by global economic conditions and uncertainties in VAT and tax implementation.