Companies retooled for pandemic response to enjoy tax breaks | Inquirer Business
Close  

Companies retooled for pandemic response to enjoy tax breaks

It took Malacañang around six months to decide on a proposal submitted at the height of the pandemic granting tax holidays to enterprises that repurposed to fight the COVID-19 pandemic, such as the production of personal protective equipment (PPE).

The Palace on Wednesday approved the 2020 Investment Priorities Plan (IPP) submitted by the Board of Investments (BOI).

ADVERTISEMENT

The IPP, which is renewed every three years, is a list of preferred business activities that qualify for BOI tax incentives, including an income tax holiday of four to six years.

The government had offered some incentives to COVID-19-related activities before the 2020 IPP, such as tax and duty exemptions for the importation of medical equipment and supplies.

FEATURED STORIES

However, with the IPP pending in Malacañang for months, the government has long had in its hands a means to encourage the private sector to channel more resources in the fight against COVID-19.

Back in May, BOI Managing Head Ceferino Rodolfo told reporters that the agency actually submitted the IPP earlier in the year, but withdrew it as the pandemic hit the country, revising it to include activities such as manufacturing of alcohol and face masks and projects in support of the Balik Probinsya program.

QUALIFIED Companies manufacturing personal protective equipment may soon avail themselves of tax holidays approved by the government for businesses repurposed for the struggle against the coronavirus pandemic. —MARIANNE BERMUDEZ

Eligible enterprises

According to Memorandum Order No. 50 signed by Executive Secretary Salvador Medialdea, essential services and enterprises that are eligible for tax breaks include the manufacture of PPEs, medicines, sanitizers and other disposable cleaning materials, and the provision of laboratory and other related equipment. Also included are crematoriums, health waste treatment, laboratories, test facilities, hospitals and quarantines.

Also covered are the manufacture of industrial goods and the processing of agriculture and fishery products, including halal and kosher foods, into semifinished, intermediate goods, or finished, consumer products.

The commercial production of agricultural, fishery and forestry products, as well as nurseries, hatcheries, postharvest facilities and other support services are counted as investment priorities as well.

Countryside development

The IPP would also give tax breaks to business activities that support countryside employment “outside of congested urban areas.”

The government is also prioritizing strategic services such as electronics engineering, contact centers, data analytics and the like, and those that involve original content such as animation, software development, game development, health-care information management systems and engineering design.

ADVERTISEMENT

Also among the preferred activities are aircraft maintenance, repair and overhaul, charging and refueling stations for alternative energy vehicles, industrial waste treatment, telecommunications, state of the art engineering, health-care and disaster risk management services, mass housing, infrastructure and logistics, innovation drivers, inclusive business models, environment and climate change-related projects, and energy-related activities.

The Bangsamoro Autonomous Region in Muslim Mindanao has also come up with its list of priority investment areas—including export activities, agriculture, agribusiness, aquaculture, fishery, basic industries, infrastructure and services, industrial service facilities, engineering industries, logistics and investment enterprises related to the Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean (Association of Southeast Asian Nations) Growth Area.

The priority list includes as well the halal industry, tourism, health and education services, energy, and investment operations carried out by Islamic banks.

The full list of eligible activities could be accessed online in the Official Gazette.

Subscribe to Inquirer Business Newsletter
Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Business, health crisis, Malacañang, medical equipment, Palace, pandemic, PPE, Tax holiday
For feedback, complaints, or inquiries, contact us.


© Copyright 1997-2020 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.