7 sectors seen eligible for tax perks until 2016

The Department of Trade and Industry (DTI) plans to complete by next month the 2014 Investments Priorities Plan (IPP), which listed seven sectors that will be eligible to incentives over the next three years.

In a public consultation held Thursday, Trade Assistant Secretary Rafaelita M. Aldaba disclosed that the preliminary 2014 IPP would include manufacturing, agribusiness and fishery, services, economic and low-cost housing, energy, public infrastructure and logistics, and public private partnership (PPP) projects.

Under the manufacturing sector, activities involving motor vehicle assembly, aerospace, shipbuilding, chemicals, copper wire rod, paper pulp, and tool and die will be eligible for incentives.

The activities listed under the agribusiness and fishery sector included extraction of natural ingredients, mechanized agriculture support services (harvesting, lowing, and spraying), and agriculture support infrastructure (drying, cold chain storage, blast freezing, bulk handling, storage facilities, packing house, trading centers and AAA slaughterhouses).

Under services, activities eligible for incentives include IC design, ship repair, testing facilities, charging stations for electric vehicles, industrial waste treatment and maintenance, and repair and overhaul of aircraft, while in the energy sector, exploration and development of energy sources and power generation plants were listed as among the preferred activities.

For public infrastructure and logistics, incentive-eligible activities were identified as airports and seaports for cargo and passenger; newly purchased ships, aircraft, seaplanes, roll-on, roll-off vessels; and duty free importation of equipment for mass transport (boats, buses and trains).

Once the consultations have been wrapped up this year, the DTI, through the Board of Investments, would submit the 2014 IPP to Malacañang for approval and signing, said Trade Undersecretary Adrian S. Cristobal Jr.

According to Cristobal, the 2014 IPP would be effective for three years to coincide with the end-of-term of the Philippine Development Plan in 2016.

“The practice is to have a new list annually, but the new document will be a three-year document so we’ll have stability and certainty for investors. Since there is an annual legal requirement of review, it will just be a minor review, maybe to add rather than subtract,” Cristobal explained.

For the past 40 years, the IPP has been reviewed and changed on an annual basis. Every year, the BOI receives recommendations from relevant government agencies and the private sector for proposed changes in the list of sectors and economic activities that are eligible for fiscal incentives under the IPP. However, the issuance of the IPP has always been marred by delays such as in the case of the 2013, IPP which was approved and issued by Malacañang only in November last year.

The 2014 IPP, Cristobal further said, would also reflect an overhaul of the IPP system. From a more general and broader list of sectors eligible for incentives, the 2014 IPP would further narrow down the sectors and the activities.