THE Board of Investments (BoI) wants more companies to take advantage of inclusive business incentives, touting them as a pathway to unlock some of the incentives contained in the Tax Reform for Attracting Better and High-Quality Opportunities (TRABAHO) Bill.
“We’re really trying to find ways to make it more enticing. The great thing is that under the House version of the TRABAHO Bill, inclusive business is one of the exemptions,” Trade Undersecretary Zenaida C. Maglaya told BusinessWorld in an interview late last year in Pasay City.
“We need to have the same incentives for the Senate version as well so IB can be pushed. We need more companies to do inclusive business,” Ms. Maglaya added.
IB models hope to ensure that the poor members of a community contribute to the company’s core functions and account for a significant portion of its revenue.
IB incentive rules require directly employing them and sourcing from them goods and services that are integrated into the value chain.
Qualified firms are entitled to a five-year income tax holiday.
Under House Bill 8083, which has been approved on third and final reading, the Strategic Investments Priority Plan (SIPP) will include firms that embrace IB and value-added production by micro, small and medium enterprises.
The SIPP is issued every three years and lists the priority investment activities that may be eligible for incentives.
However, Ms. Maglaya said companies that intend to prove that they employ IB will need to clear a number of hurdles to meet the requirements.
Under the 2017 to 2019 Investments Priority Plan, at least 25% of total costs of services must be sourced from micro and small enterprises (MSEs).
Tourism projects, specifically, should hire at least 25 such workers directly while agri-modernization projects should employ at least 300 individuals from the marginalized sector.
On top of these requirements, women must make up 30% of the work force.
The salary given should meet minimum wage or a baseline income plus a 20% increase, whichever is higher.
IB-qualified firms are also required to offer technical assistance and capacity-building to MSEs, and facilitate their access to finance. — Janina C. Lim
