IESET.
Policies·ph_create_corporate_tax_cut_2021

CREATE: Corporate Recovery and Tax Incentives for Enterprises Act (RA 11534)

PHL·2020 ·enacted 2021-03-26·PDP-Laban-led supermajoritycandidate
movestax corporatesectoral licensingsectoral subsidy

What the policy did

Package 2 of the Comprehensive Tax Reform Program, signed 26 March 2021 with retroactive effect to 1 July 2020. Cut statutory corporate income tax from 30% (the highest in ASEAN) to 25% for large corporations and 20% for domestic corporations with taxable income up to ₱5m and assets up to ₱100m. Legislated further 1 ppt annual reduction to 20% by 2027. Rationalised the sprawling system of fiscal incentives previously administered by 14 Investment Promotion Agencies (PEZA, BOI, etc.): time-bound income tax holidays (4-7 years) followed by special corporate income tax of 5% of gross income or enhanced deductions for registered business enterprises, subject to Strategic Investment Priority Plan targeting and review by the Fiscal Incentives Review Board. COVID-19-framed as a stimulus measure reducing the business-tax burden by ~₱1 trillion over 10 years.

Policy-content fingerprint — what this policy moved, on which axes

Per invariant 3, reforms are scored by what they did on each channel-separated axis, not by the party that enacted them. This fingerprint is how the policy-match engine finds historical analogues.

intended
tax corporate
fiscal.tax_corporate
Statutory and effective corporate tax rates, treatment of depreciation, and international competitiveness.
decreased · strong
lower corporate tax burden
Statutory CIT cut from 30% to 25% (large) and 20% (SME) with legislated phase-down to 20% by 2027; the largest single corporate-tax move in recent Philippine history.
sectoral licensing
regulatory.sectoral_licensing
Sector-specific licensing regimes, concentration / quota allocation, state-controlled entry (energy, telecoms, healthcare, banking).
increased · weak
tighter sectoral licensing / more state gating
Rationalisation of fragmented IPA incentive regimes into a unified framework under the FIRB; transparency and sunset disciplines imposed.
sectoral subsidy
fiscal.sectoral_subsidy
Targeted industrial and sectoral subsidies (renewable energy, chip manufacturing, agriculture, green hydrogen, etc).
decreased · weak
reduced sectoral subsidies
Time-bounded tax holidays and sunset review reduce indefinite incentive entrenchment compared with the prior system.

Enacted by

Empirical evidence — linked hypotheses

Explicit links are curated by the author. Inferred links are hypotheses in the library that test the same axes this policy moved — the framework's answer to "what does the data say about a policy like this?".

Among high-income economies 1990-2020, services-sector competition — measured by low barriers to entry, low incumbent-protection scores, and high churn in retail, transport, communications, and professional services — predicts long-run prosperity (real GDP per capita growth and labour-productivity growth) better than manufacturing-specific industrial policy spending.
sectoral_competition_services_productivityinferred
viaregulatory.sectoral_licensingfiscal.sectoral_subsidy
PARTIAL — coef=+0.000842, p=0.361 (above α=0.05); direction inconclusive
partial
Biden's IRA/CHIPS industrial policy will show partial success on capacity-building metrics and mixed results on job creation, consistent with the conditional view that industrial policy works where targeting is technically competent and governance is strong.
industrial_policy_semiconductor_chips_act_effectivenessinferred
viafiscal.sectoral_subsidyregulatory.sectoral_licensing
inconclusive — Stacked: (4/4) spec-named semi-specific series unavailable on disk (oecd:STAN_INDUSTRY ISIC C26, bls:CES3133, ilostat:semiconductor employment, c…
run pending
The 2022-2026 window saw rhetorical and policy-stated revival of Western large-scale nuclear power: France committed to EPR2 fleet (6 + 8 reactors by 2050) under loi accélération du nucléaire 2023; UK confirmed Sizewell C investment FID 2024 + Small Modular Reactor (SMR) competitive selection 2024-2025; US Vogtle Unit 4 commercial start July 2024 + several SMR / advanced-reactor licensing applications; Japan re-pivoted to nuclear restart + lifetime extension (2023 GX framework permits >60-year operation); Sweden, Finland, Netherlands, Belgium reversed phase-out policies.
nuclear_revival_2023_2026_western_construction_startsinferred
viafiscal.sectoral_subsidyregulatory.sectoral_licensing
PARTIAL — shape=panel_summary, |Δ_log|=0; claim direction ambiguous
partial
Across an unbalanced panel of OECD and emerging-market economies 1980-2020, higher firm-entry rates (new business registrations per 1000 working-age population) predict stronger subsequent 20-year total-factor-productivity growth, after controlling for initial GDP per capita, human capital, and capital-deepening rates.
firm_entry_rate_long_run_productivityinferred
viaregulatory.sectoral_licensingfiscal.sectoral_subsidy
SUPPORTED — coef=+0.06104 (sign matches claim +), p=0.0079
supported
Consumer product variety and price-adjusted welfare improve more after episodes of trade liberalisation and competition-policy reform than after state industrial-policy episodes of comparable duration and scale, in a panel of middle- and high-income countries 1980-2020.
consumer_choice_variety_trade_market_reforminferred
viafiscal.sectoral_subsidyregulatory.sectoral_licensing
INCONCLUSIVE_DATA_PENDING — treatment 'competition_reform_episode' has no within-country variation under country fixed effects
run pending
The 2022-2026 wave of major-economy industrial-policy programmes — US IRA + CHIPS, EU Critical Raw Materials Act + Net-Zero Industry Act, EU Chips Act, Japan Green Transformation (GX, ¥150tn / ~$1tn announced), Korea K-Chips + Korean New Deal 2.0, China 14th Five-Year Plan + Made-in-China-2025-2.0 with semiconductors and clean energy as national-security frontier — represents the largest coordinated wave of industrial-policy spending in the post-1970s OECD record.
green_industrial_policy_global_chip_race_2022_2026inferred
viafiscal.sectoral_subsidy
INCONCLUSIVE_DATA_PENDING — insufficient observations after listwise deletion (20)
run pending
Developmentalist East Asian states (South Korea, Taiwan, Singapore, China) pursuing active industrial policy — export-discipline, selective credit, state-directed FDI screening, targeted sector promotion — achieved higher long-run real per-capita GDP growth over 1960-2019 than otherwise-comparable countries starting at similar income levels in 1960.
industrial_policy_developmentalist_states_growthinferred
viaregulatory.sectoral_licensingfiscal.sectoral_subsidy
SUPPORTED — avg ATT across 4 developmentalist cases (KOR/TWN/SGP/CHN) is +1.088 log-points at 40-yr horizon (~+197%). 4/4 cases above the 30 log-point threshold…
supported
Ireland’s long-run convergence from a middle-income to a high-income economy during 1987–2024 is better predicted by trade openness, tax competitiveness, and FDI entry than by classic industrial planning.
ireland_market_opening_fdi_frontier_1987_2024inferred
viafiscal.tax_corporatefiscal.sectoral_subsidy
supported
supported

Similar historical policies

Ranked by axis-fingerprint overlap with this policy. Direction match bolded — those are the closest historical analogues. Shape of the match is what drives policy-outcome comparison, not the country or party label.

References