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By Katrina Mennen A. Valdez, Reporter
The cabinet members on Thursday approved the
trimmed number of investment projects qualified to enjoy tax
incentives and other perks, and indicated items up for revisions.
Trade Undersecretary Elmer C. Hernandez, who is
also BOI managing head, told reporters that the cabinet members
indicated some revisions before they approved the 2008 IPP.
Among the sectors that may still benefit from
the full suite of incentives are infrastructure, research and
development , constructive and direct exports, agriculture and
agribusiness, tourism, engineered projects and strategic
investments.
Considered part of infrastructure are mass
housing, which will be limited to socialized and low-cost housing
projects, roads, highways and toll ways, mass railway transport,
airports, ports facilities, air transport and warehousing.
Shipping projects, however, must fall within the
government-identified logistics hub before they qualify for perks.
Meanwhile, power generation projects may enjoy
tax perks only if they utilize renewable energy or alternative
energy sources and if they are undertaken by the Small Power Utility
Groups.
Added to the infrastructure sectors are pipeline
projects for oil and gas distribution, which will prevent further
traffic jams and all projects under build operation projects.
With respect to agriculture and agribusiness
ventures, those qualified for tax holidays will be limited to
commercial production, processing of fishery products, feeds and
organic fertilizers.
“To qualify, there should be either a
contract-growing scheme or it should own a production plantation
that will support the farmers,” Hernandez said.
For tourism projects, the government will still
extend perks to hotels and resorts, and the development of
healthcare and wellness facilities.
Information technology has been folded into
constructive and direct exports.
The BOI official said expansion and
modernization projects that will be undertaken by existing investors
are no longer entitled to income-tax holidays “unless [they] are
micro, small and medium enterprises, direct and constructive
exporters, printing publications of books and content developers,
and the manufacturing of long steel, billets and reinforcement steel
bars.”
Since micro, small and medium enterprises form
the backbone of the country’s economy, they will automatically
enjoy full incentives if they choose any of the six sectors listed
on the IPP.
Meanwhile, new projects in the same activity and
with same owners up to 50 percent will no longer be entitled for ITH,
except those direct and constructive exports, MSMES, socialized and
low cost housing, tourism projects in accordance to the Department
of Tourism masterplan, shipping and air transport serving the
nautical highways and missionary routes.
On engineered products, incentives will be
granted to shipbuilding, machineries and equipment including parts
and components, iron and steel products, and hot rolled and cold
rolled projects provided they are integrated with basic iron and
steel facilities.
Motor vehicles will only be granted with ITH
only if the manufacturers will pour in money into the parts and
components.
With respect to strategic industries, an
investment of at least $300 million is required to be considered as
such, provided they also create a big number of jobs or use new and
innovative technology.
The BOI official said strategic investments or
projects with sovereign guarantee and guaranteed of return, however,
are subject to consultation with the National Economic and
Development Authority and the Department of Finance.
On mandatory inclusions, mining will have to use
an innovative technology to optimize high- and low-grade mineral
deposits in the Philippines. Meanwhile, storage and marketing and
distribution will not enjoy tax perks except when located in the
government-identified logistics hubs.
Privatized projects paying income tax at the
time of privatization will also not enjoy incentives except those
that are pre-qualified before the effectivity of the 2008 IPP.
All projects that will be located in least
developed areas or 30 poorest provinces will also enjoy ITH.
Lastly, on re-registration, registered projects
that stop operation and canceled and registered projects that are
not implemented and subsequently canceled will no longer have ITH.
“With respect to having a pioneer status, it
shall not be automatically granted on the basis of the new product
or new technology,” Hernandez said.
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