MANILA – D&L Industries, Inc., a chemical and food manufacturer, has felt the impact of a lower corporate income tax (CIT) rate in its bottom line with the newly-enacted Corporate Recovery and Tax Incentives for Enterprises (CREATE) law.
In a virtual press briefing Wednesday, D&L president Alvin Lao said the company had tax savings of PHP32 million in the first quarter of the year as the CIT rate declined to 25 percent from the previous 30-percent rate.
Lao said it posted a net income of PHP695 million from January to March this year, which is 35 percent higher than the PHP515 million net income in the same period in 2020.
He added that although the bulk of the net income increase can be attributed to the firm’s improved operation, the CREATE law has helped in boosting its bottom line.
President Rodrigo Duterte on March 26 signed into law the CREATE Act to attract more investments and maintain fiscal prudence and stability.
With its signing into law, D&L only paid PHP151 million in CIT at 25 percent instead of PHP184 million when the CIT rate was at 30 percent.
Lao estimated that the company could have tax savings of PHP120 million to PHP130 million for the entire 2021 with the implementation of the CREATE law.
“Any extra cash (that) we have…either it will go to spending for that (Batangas plant) expansion, which is almost done, or as cash dividends,” he said.
D&L targets to complete the construction of First Industrial Township in an economic zone in Batangas this year.
Lao said dividends for shareholders this year could be “possibly higher” amid tax savings.
He said D&L ended the first quarter of the year on a positive note as all its business segments posted significant recovery compared to last year’s performance.
Its food ingredients business increased by 37 percent from January to March 2021 from the same quarter last year, while chemicals for personal and home care use grew by 17 percent, specialty plastics up by 27 percent, and aerosol and consumer products, up by 35 percent.
Demand for the company’s products abroad also significantly recovered in the first quarter of the year as exports sales rose 84 percent compared to 2020, with contribution to total sales reaching a record high of 34 percent during the first three months of 2021. (PNA)