THE Fiscal Incentives Review Board (FIRB) approved tax incentives for a P1.5-billion roll-on, roll-off vessel which will serve both the passenger and cargo markets between Cebu City and Cagayan de Oro, the Department of Finance (DoF) said in a statement.
The DoF, whose Secretary, Carlos G. Dominguez III, chairs the FIRB, said the incentives include a four-year income tax holiday, five years of enhanced deductions, and 11 years of duty exemptions on imports.
The statement did not identify the shipping line that applied for incentives. Mr. Dominguez subsequently named the applicant as Trans-Asia Shipping Lines, Inc., (TASLI) in a message to reporters.
TASLI is based in Cebu and currently operates a Cebu-Cagayan de Oro service four times a week, according to its website.
Trade Undersecretary and Board of Investments Managing Head Ceferino S. Rodolfo said incentives typically are granted because the expected benefits to the economy are likely to outweigh the revenue foregone by the government in waiving taxes.
In the case of incentives granted to a shipping line, the benefits to the broader economy include greater connectivity, improved competition in the shipping industry, and lower cargo costs, he added.
The new vessel will offer reduced travel time between the two ports, the DoF said. The current TASLI service takes nine and a half hours, according to the posted schedule for arrivals and departures on the shipping line’s website.
Trade Secretary and FIRB Co-Chair Ramon M. Lopez says that the project will “continue to generate revenue for the government even after the incentive period, which is a substantial economic benefit the FIRB considers in granting incentive applications.”
The new ship will also enhance the region’s attractiveness as a destination by promising greater passenger safety, welfare, and comfort, Mr. Lopez said.
Cebu is a key trading center in the Central Visayas while Cagayan de Oro is the economic center of Northern Mindanao, home to industry and gateway to the agricultural output of the hinterland.
Mr. Dominguez said the grant of tax incentives “aligns with the National Government’s aim to modernize transportation and to increase competition in the shipping industry in the Philippines.”
In 2021, the FIRB approved the tax incentives applications of five big-ticket projects from the manufacturing and mass housing industries, which took in combined investment capital of P119.5 billion. — Tobias Jared Tomas