Guidelines for 2020 IPP out this month â BOI

Guidelines for 2020 IPP out this month — BOI

Louella Desiderio (The Philippine Star) - December 6, 2020 - 12:00am

MANILA, Philippines — The Board of Investments (BOI) plans to release this month the guidelines for the 2020 Investment Priorities Plan (IPP), the blueprint for activities that can qualify for tax perks.

“Hopefully, we’ll be able to release the IPP 2020 guidelines before Dec.19,” BOI managing head Ceferino Rodolfo said.

He said the new IPP is basically a carryover of the previous or the 2017 to 2019 IPP, with the addition of two activities such as projects related to addressing the coronavirus disease pandemic and those creating job opportunities in the countryside, including the Balik Probinsya program, which will receive up to six years of income tax holidays.

Other activities are manufacturing including agro-processing; agriculture, fishery, forestry; strategic services including integrated circuit design, creative industries, and maintenance, repair and overhaul of aircraft;  healthcare and disaster risk reduction management services; mass housing; infrastructure and logistics including local government unit – public private partnership projects; innovation drivers; inclusive business models; environment or climate change-related projects; and those in energy.

Export activities and those covered by special laws and priority investment areas in the Bangsamoro Autonomous Region in Muslim Mindanao are also listed under the new IPP.

“This will be the transitional listing of priority sectors that we will be promoting both for domestic and foreign investors as we transition to the Strategic Investment Priorities Plan (SIPP) under the CREATE (Corporate Recovery and Tax Incentives for Enterprises) bill,” Rodolfo said.

CREATE seeks to reduce the corporate income tax rate to bring it closer to neighbors in Southeast Asia, as well as make the grant of incentives transparent, targeted, time-bound and performance-based.

The Senate approved the CREATE bill on third and final reading last week.

Rodolfo hopes the House of Representatives, which passed its version of the proposed measure last year, would adopt the Senate’s version so the bill could already be transmitted and signed into law by the President.

“With the IPP 2020 and the SIPP under the CREATE bill, I think we really have a good chance of being able to compete in terms of incentives and bringing in foreign direct investments,” he said.

He said the BOI has been supportive of the CREATE because the measure would remove the nationality bias and the export bias under the current system of incentives.

At present, he said the only way for foreign companies to receive incentives when they invest in the Philippines is if they export at least 70 percent of their production.

He said removing the nationality and export bias is important as there are foreign companies interested to invest in the Philippines to cater to the domestic market.

Currently, he said a firm engaged in the manufacturing and assembly of motorcycles has expressed intent to consolidate its operations in the Philippines and close down its facilities in two other countries in Southeast Asia.

“They were not eligible for EO 226 (Omnibus Investments Code) before because they are a foreign company investing in the Philippines for the domestic market and also for export,” he said.

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