CREATE has been certified for immediate passage by March 9. It is up to Congress to meet this deadline.
Beyond being an additional pandemic relief measure, CREATE’s long-term goal is to improve “the equity and efficiency of the corporate tax system.” It provides an additional incentive for small businessmen to form a corporation instead of remaining as sole proprietors. To illustrate, the optional standard deduction benefit of an individual under the current regulations is computed based on hisgross income
The grant of all these reforms is consistent with the Government’s goal of increasing its tax collection. It will be easier for government to regulate companies as against individuals. With the introduction of these reforms, the BIR will have an easier time determining non-paying individual taxpayers. They typically deal with big businesses, which are generally required to report to BIR the amounts paid to their suppliers, including individual taxpayers.
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