THE DEPARTMENT of Trade and Industry has started the review of the Investment Priorities Plan (IPP) with the goal of “modernizing” the incentive system to reflect the thrust of the administration toward inclusive growth.
Trade Secretary Ramon Lopez said the department was already working on the basic framework for the proposed revisions of the IPP and conducting consultations with industry stakeholders on how it could become more relevant to local industries.
“We want to modernize the IPP and make it more relevant. We will have these consultations so we can identify and remove those industries, activities and projects that are no longer useful. We can also add some activities provided these are relevant [to what the government is pushing for],” he said.
The target is to have at least the first draft of the revised IPP by yearend.
Recently, the DTI, through the Board of Investments, has introduced amendments with the issuance of a memorandum circular, which identified 134 calamity-stricken cities and municipalities as “least developed areas (LDAs)” under the IPP. This meant that investment projects in these low-income and disaster-stricken areas would be given incentives, including tax deductions, to encourage economic activities.
“Aside from coming up with policies, we need to have interventions for the communities… Specialized incentives are required if you want to create more economic activities and a bigger and richer economic base at the bottom of the pyramid. We have to start from the bottom and provide a comprehensive approach that will assist the poorest of the poor communities,” Lopez explained.
For instance, registered projects located in identified LDAs will be entitled to “pioneer incentives and additional deduction from taxable income equivalent to 100 percent of expenses incurred in the development of necessary and major infrastructure facilities unless otherwise specified in the IPP’s specific guidelines,” as provided under Memorandum Circular No. 2016-003.