The Department of Finance, Department of the Interior and Local Government, and Department of Trade and Industry have issued new guidelines to standardize the imposition of local taxes, fees, and charges on registered business enterprises availing themselves of tax incentives.
Joint Memorandum Circular No. 01-2026, which took effect on March 30, seeks to create a more predictable and competitive investment climate by clarifying how local taxes apply to registered business enterprises, or RBEs, under Republic Act No. 12066.
The circular, formally titled the Guidelines on the Imposition of Local Taxes, Fees, and Charges on Registered Business Enterprises Availing of Tax Incentives Under Republic Act No. 12066, aims to address long-standing ambiguities caused by varying interpretations of the CREATE and CREATE MORE laws, particularly for transitioning RBEs.
By establishing a uniform framework for local government units, investment promotion agencies, and private enterprises, the guidelines are expected to improve ease of doing business, strengthen tax compliance, and boost investor confidence.
The circular clarifies that the Registered Business Enterprise Local Tax, or RBELT, applies to RBEs availing themselves of an Income Tax Holiday or the Enhanced Deductions Regime in economic zones, including expansion areas, under the CREATE MORE Act.
It also provides that investment promotion agencies may enter into a memorandum of agreement with local government units to facilitate the collection, sharing, and remittance of the RBELT.
Under the guidelines, the RBELT must not exceed two percent of the gross income of the RBE’s registered project or activity. It will be in lieu of all local taxes, fees, and charges, including local business taxes and real property taxes.
Once a local government unit imposes the RBELT through an ordinance, it may no longer separately impose taxes outside the RBELT framework.
The guidelines further state that when an investment promotion agency owns the land but grants beneficial use to an RBE, the RBE will be considered the taxable person and may be liable for real property taxes and other applicable local taxes, including the RBELT.
To support implementation, the Fiscal Incentives Review Board Secretariat held nationwide town hall meetings on May 5, 12, and 14 to brief stakeholders on the application of the RBELT.
“Our goal is to translate policy into practice, ensuring that reforms are delivered, translated, and felt by our investors. The CREATE MORE Act was designed to make the Philippines a more competitive and investment-friendly destination,” FIRB Chairperson and Finance Secretary Frederick Go said.
“Our responsibility now is to ensure that its provisions are implemented clearly, consistently, and effectively. Through clear guidance and coordinated implementation, we are making compliance easier, providing greater predictability, and encouraging more investments into the country,” he added.