Traversing the course of revival: CREATE Act to help the Philippine Shipbuilding industry
Updated: Jun 12, 2022
It is unbeknownst that the once vibrant shipbuilding industry in the Philippines faced a tragic turn as it encountered disruptions and rising expenses with the economic slowdown brought about by the COVID-19 pandemic. In hopes of its revival, the Philippine Government has identified the shipbuilding sector as one of the strategic sectors for the country’s economic recovery, consequently exploring measures to encourage investment.
Under the enacted Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, the shipbuilding sector in the country is expected to elicit economic benefits along with other strategic sectors identified by the government. This law is geared towards providing financial relief not only to domestic shipyards, but also foreign shipping shipyards operating in the Philippines.
In the Philmarine 2021 conference, the Department of Trade and Industry’s (DTI) Chief Investments Specialist on Shipbuilding, Reynaldo Lignes further tacked the benefits made available by the CREATE Act. Moreover, the Philippines 2020 Investment Priorities Plan (IPP) also identified shipbuilding as one of the preferred investing activities.
The new IPP now allows foreign-owned shipbuilding enterprises to cater to domestic markets. Furthermore, the new IPP entitles the shipbuilding industry to reduce corporate income tax (CIT) from 30% to 25% for domestic and foreign shipyards.
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