Goking bares ‘Create' Law for a robust tax system in Oro

NEWLY appointed member of the Cagayan de Oro Local Investment and Incentive Board (LIIB) Councilor George S. Goking on Thursday bared the Corporate Recovery and Tax Incentives for Enterprises (Create) that has the potential of increasing local revenue.

Create was signed into law by former President Rodrigo Duterte on March 18, 2021, introduced reforms to the corporate income tax and incentives systems and to attract more investments and maintain fiscal prudence and stability.

“As structured, Create is not simply a tax reform meant to provide a simple, equitable, and competitive tax system,” said Goking.

He even explained a fiscal responsibility for the survival of the city's economy, businesses especially the micro, small and medium enterprises (MSMEs) employing more than 60 percent of our workforce.

“Create Law is more than anything else,” said Goking chair of the City Council committee on trade and commerce and ways and means.

Goking was appointed by City Mayor Rolando A. Uy as LIIB member through Executive Order No. 077-2022 appointing the members of the board, under Ordinance No. 13418-2018, otherwise known as the Cagayan de Oro Investments Incentive Code of 2018.

In a committee meeting Thursday, Goking said Create was crafted right in the middle of a pandemic, a hurting economy, and a worldwide slump where chaos is the order of the day and survival of the fittest is the game. 

He explained that Create is a fiscal response to mitigate widespread involuntary hunger now experienced by millions of families, and counting. 

“It is a fiscal response, the most direct and cost-efficient stimulus to revive a once considered fastest growing economy in the region,” said Goking.

Create is well-crafted and targeted to address COVID-19 priorities by first giving relief to small businesses or MSMEs, lowering outright their tax rate from 30 percent to 20 percent, an equivalent subsidy of 10 percent of net income effective July 2020 and every year onward. 

Goking added these savings could be used to retain employees or to cope with the required facilities of working under a new normal. 

In an earlier development, the MSMEs entitled to this relief are those with taxable net income not exceeding P5 million and total assets (excluding land) not exceeding P100 million. 

“Create also provides immediate relief to MSMEs to recover quickly,” Goking stressed.

He said that a provisional reduction in taxes for a period of three years from July 2020 up to June 2023 was granted. 

The 3 percent business tax collected on every one peso of sales was reduced from 3 percent to 1 percent, and the Minimum Corporate Income Tax from 2 percent to 1 percent.

“Both these taxes are not net-income based, hence are paid regardless of income. Both are based on gross—one on gross sales, the other on gross profit,” the report said.

During a committee meeting on the proposed ordinance for comprehensive assistance for the revival of the economy or the “Bangon-Balik Higala Ordinance,” authored by Vice Mayor Jocelyn Rodriguez, Goking said that the Create Law would address the criticisms that arise.

“Addressing the criticism that reducing income tax rate has no benefit to businesses during this pandemic as there is no taxable income to speak of,” said Goking.

Meanwhile, also appointed in the LIIB with Goking were city legal officer lawyer Kenneth O. Tamala, as vice chair, John Asuncion of the Local Economic and Investment Promotion Center, Councilor Edgar Cabanlas, and the representatives of Misamis Oriental Filipino-Chinese Chamber of Commerce and Oro Chamber of Commerce and Industry Foundation, Inc., as members.

The city government is actively encouraging the participation of the private sector in the promotion of economic growth and prosperity. 

With Mayor Uy, Goking said the city government grants fiscal and non-fiscal incentives to investors, both local and foreign, to attract new investors and retain existing investment and encourage their expansion to create and maintain a business-friendly environment.

"That will accelerate economic progress, generate employment opportunities, increase revenues, reduce poverty, and improve the overall quality of life for the people of the city," Goking explained.