MANILA -The Board of Investments (BOI) has issued an order making private firms with their own renewable energy (RE) facilities to power their operations eligible for more government incentives.
BOI Director Sandra Marie Recolizado said that through BOI Memorandum Circular No. 2023-006 signed last Oct. 16, businesses generating renewable energy will also be able to avail themselves of income tax holidays.
The order was issued as part of the government’s broader efforts to further promote the use of renewable energy. For self-financed energy efficiency projects (EEP), the 5-percent Special Corporate Income Tax or the 5-percent tax on gross income earned will be waived based on the revenue of the project using the energy efficiency project.
To enjoy this, the existing project must already be registered under an investment promotion agency, such as the BOI or the Philippine Economic Zone Authority.
The income tax holiday incentive will also be limited to the prescribed period under the Corporate Recovery and Tax Incentives for Enterprises Act, or until the recovery of 50 percent of its capital investment, excluding the cost of land and working capital of the EEP. Prior to this order, perks granted to renewable energy projects for companies’ own use were limited to duty-free importation of capital equipment.
BOI chief Ceferino Rodolfo highlighted the case of the EEP at the Cebu Mitsumi Plant run by MinebeaMitsumi Inc. in the city of Danao, a 7.9 megawatt (MW) solar farm that can power 8 percent of the facility’s energy needs and reduce carbon emissions by 6,833 tons per year.
Rodolfo said it is currently the largest solar power generation system among all Japanese companies in the country.
Operation of the solar farm began Thursday, after the ceremony marking the completion of the installation.