THE Board of Investments (BoI) said Wednesday that it has proposed to modify the 2020 Investment Priorities Plan (IPP) to classify various pandemic-mitigating activities as eligible for incentives, with the adjustments awaiting President Rodrigo R. Duterte’s approval.
“Nagsubmit tayo early part of this year kaya lang inabutan tayo ng pandemic na hindi pa siya napipirmahan. So winithdraw natin tapos pinalitan natin. Naglagay tayo ng two items, naglagay tayo ng 2 activities that can qualify doon sa incentives (We submitted the proposed changes earlier in the year but it was overtaken by events after the pandemic. So that proposal was withdrawn and we resubmitted with two new activities eligible for incentives),” BoI Managing Head Ceferino S. Rodolfo said in a virtual news conference Wednesday.
He added: “Ang gusto natin sana mailagay ‘yung ability or ‘yung power to be able to declare activities related to the Balik Probinsya (Program) na sana pioneer para longer ITH (income tax holiday) . Kasi ngayon, di ba yung mabibigyan lang natin na pioneer yung mga LDA (less developed areas). Eh Ang hirap-hirap talaga magdeclare ng isang lugar na LDA…kasi masyadong strict yung ating guidelines for that (We wanted to add the power to declare as pioneer activities those related to Balik Probinsiya, to allow a longer ITH. Right now pioneer status is hard to come by because the qualification process for LDAs is strict).”
Balik Probinsiya is a government incentive to decongest the capital and seed the provinces with more businesses and people, after the quarantine imposed on Metro Manila crippled economic activity in the first quarter.
He said the BoI also included in the IPP an item for the production and import of medical face masks and ventilators.
The new IPP, Mr. Rodolfo said, was designed to aid the transition towards the implementation of the CREATE bill or the Corporate Recovery and Tax Incentives for Enterprises Act, a revised version of the Corporate Income Tax and Incentives Rationalization Act (CITIRA) bill which is pending at the Senate.
“Kung nagregister ka before the CREATE at di ka pa nakakakuha ng incentives (If you applied for incentives before the CREATE bill and were rejected), you can now be given the opportunity to either stick with the current regime or migrate to CREATE in case you are qualifieda,” he said.
The CREATE bill, which is part of the government’s three-phase recovery plan, proposes a reduction in the corporate income tax (CIT) rate to 25% from the current 30% starting July. — Arjay L. Balinbin