Metro Manila-based investment projects involving the manufacture of critical goods such as test kits, personal protective equipment (PPE) and medicine may now avail of tax perks amid the coronavirus pandemic, according to the Board of Investments (BoI).
In Memorandum Circular no. 2020-006 dated Sept. 4, the BoI said it can revise the 2017 Investment Priorities Plan (IPP) that identifies projects that are given income tax holidays.
Based on the memorandum, identified goods and services addressing the pandemic will now be exempt from the “locational restriction policy” or the rule that incentives are not applied to most projects in the National Capital Region.
BoI said these projects will also now be exempt from the modernization requirement, or the policy to improve facilities and processes that will result in a 25% substantial reduction of production cost.
These projects include the production of medicine considered critical by the Health department; medical equipment like thermometers and test kits; PPE such as masks, goggles and face shields; and surgical equipment; laboratory equipment. Also covered are projects involving the manufacturing of medical supplies such as alcohol, sanitizer, hand soap, cleaning materials, and common medicine such as paracetamol, vitamins and mefenamic acid.
Raw and packaging materials used for the production of these goods as well other supplies identified by the Health department will also be included. Support and maintenance services for laboratory and medical equipment are also covered by the circular.
The policy is considered in effect “during the existence of the pandemic” and can be extended in cases of national interest or emergency.
Under the 2017 investment priorities plan, BoI said that it selects projects with substantial benefits to the economy for incentives. The income qualified for the income tax holiday is limited to the income directly attributable to eligible revenue from the registered project. — Jenina P. Ibañez