BOI urged to release list of projects for tax perks
MANILA, Philippines — To immediately attract more foreign investors who can help generate jobs as the Philippines emerges from the COVID-19 pandemic, the Fiscal Incentives Review Board (FIRB) has urged the Board of Investments (BOI) to release this month the menu of projects qualified for tax incentives.
The Department of Trade and Industry’s (DTI) BOI shepherds the crafting of the new strategic investment priority plan (SIPP), which, in tandem with the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, would line up investment opportunities and their accompanying investor perks.
Finance Secretary Carlos Dominguez III, who chairs the inter-agency FIRB to oversee CREATE’s implementation, said at the FIRB meeting last December that “the release and publication of the SIPP will serve only as the first step in attracting potential investors.”
“Once the categories are identified, the next step is for each of the investment promotion agencies (IPAs) to identify the specific companies they want to invite, and then discuss with them what it would take for them to invest in the country,” Dominguez said. IPAs like the BOI give away tax and other perks to qualified projects.
Dominguez told reporters in December that once the BOI comes out with the SIPP, the government must “focus on the industries that we want to bring in.”
In 2020, Dominguez said the Philippines must chase after investments in optics like those being used in phone cameras, energy-saving equipment, ocean energy, and data analytics, among other “forward-looking” and “next-best” industries to be determined by the BOI.
In a statement on Wednesday (Jan. 12), the DOF quoted Trade Secretary Ramon Lopez, FIRB co-chair, as saying that the current, transitional 2020 investment priorities plan (IPP) of the BOI needed to be followed through by the SIPP this month.
Lopez, who also chairs the BOI, ordered the DTI-attached agency to present the SIPP within the month, “considering that a number of industry studies and parameters have already been considered in the drafting.”
Finance Undersecretary Antonette Tionko said also last month that once the BOI finished the SIPP, the FIRB was expected to immediately approve the new plan.
In 2021, House ways and means committee chair and Albay Rep. Joey Salceda lamented the delayed crafting of the SIPP.
Salceda, who shepherded the CREATE’s passage in the House, had noted that the Philippines continued to lag behind most of its Asean neighbors in attracting foreign direct investment (FDI). CREATE was meant to not only serve as relief for pandemic-hit firms through lower corporate taxes but also as a lure for big foreign investors through hefty incentive packages.
It did not help that CREATE, President Rodrigo Duterte’s second tax package pitched by the DOF as early as 2016 when the administration assumed office, took five years to hurdle Congress, putting investors on a prolonged wait-and-see stance.
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