Create More’s redefinition of the FIRB and IPAs’ roles
By: Atty. Rio Krisel Bautista on July 27,2025
THE Create More Act or Republic Act 12066 was passed to improve our country’s competitiveness and make the grant and availment of incentives more equitable and efficient.
Aside from making it easier for export-oriented enterprises to avail of value-added tax (VAT) zero-rating on their purchases (see our article published on June 19, 2025), Create More also introduced amendments to our Tax Code to redefine the respective functions and powers of the Fiscal Incentives Review Board (FIRB) and investment promotion agencies (IPAs) in the administration and approval of tax incentives for investments.
Create More increased the IPAs’ power to grant tax incentives to registered projects or activities with investment capital of P15 billion and below, provided such projects or activities are listed in the Strategic Investment Priority Plan (SIPP).
For investment capital exceeding P15 billion, it is the FIRB, upon the recommendation of the lPA, that will approve or disapprove the grant of tax incentives to the extent of the registered project or activity listed in the SIPP.
Prior to the Create More Act, IPAs could only grant incentives to projects with investment capital of P1 billion and below under delegated authority from the FIRB. With the Create More amendments, IPAs no longer act under a delegated FIRB authority. In effect, they grant incentives under their respective authorities.
To balance the increase in the IPAs’ threshold powers, however, Create More expanded the powers and functions of the FIRB and vested it with oversight, regulatory and quasi-judicial authority over the IPAs’ grant of tax incentives. With these expanded powers, the FIRB is mandated to review and audit compliance by IPAs and other government agencies on the administration and grant of tax incentives.
The FIRB is also empowered to impose sanctions, including the withdrawal, suspension, or cancellation of the IPAs’ authority to grant incentives.
In relation to its quasi-judicial powers, the FIRB may conduct inquiries, investigations and, when necessary, initiate appropriate criminal and administrative cases against erring officials and employees in accordance with procedures prescribed under existing laws.
Significantly, as part of its review powers, the FIRB may prescribe data requirements, reporting standards, processes and procedures for incentive applications and cost-benefit calculations for IPAs to follow. These are essential to determine if the tax incentives will generate economic benefits and justify the corresponding fiscal cost to the government. With regular monitoring, the government can make informed decisions about which tax incentives it should continue, adjust, or withdraw.
It is important to note that the Create More Act prescribed additional considerations in the granting of incentives, including the generation of local employment in line with the “Trabaho Para sa Bayan Act,” and other standard and project-specific performance metrics that may be imposed by the FIRB or IPAs.
Create More also enhanced the FIRB’s role in checking and verifying the compliance of registered business enterprises on agreed target performance metrics and relevant laws or issuances. This compliance monitoring will now be carried out in coordination with and through the IPAs.
Without doubt, the expanded power of the FIRB allows it to ensure compliance by IPAs and other government agencies with existing tax incentive laws, rules and regulations. In effect, it will foster accountability, ensuring that tax incentives are granted fairly, monitored effectively and aligned with national development priorities.
While the FIRB has been vested with broader regulatory and quasi-judicial powers to uphold transparency and accountability, IPAs have likewise been granted greater autonomy in approving incentives for registered projects within defined thresholds. This significant change empowers them to act with greater efficiency in granting tax incentives to investments while ensuring that such investments remain subject to the FIRB’s oversight and regulatory powers.
In the end, the Create More Act, in striking a balance between regulation and efficiency, improved the manner by which tax incentives are being granted with the aim of attracting more investments to the Philippines.
Rio Krisel G. Bautista is an associate of Mata-Perez, Tamayo & Francisco (MTF Counsel). This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. If you have any question or comments regarding this article, you may email the author at info@mtfcounsel.com or visit MTF website at www.mtfcounsel.com