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By Katrina Mennen A. Valdez, Reporter
THE government this year may limit tax perks
granted to mining and mass housing investments, the Board of
Investments (BOI) said.
In a briefing, Trade Undersec-retary Elmer C.
Hernandez, who is also BOI managing head, said the agency may still
promote all the sectors included in the 2007 Investments Priorities
Plan (IPP) in line with the Medium Term Philippine Development Plan.
“The criteria [for the 2008 IPP] is whether
these certain sectors still need full incentives from the
government,” he said, adding the BOI is assessing whether sectors
that enjoyed government incentives benefited the country.
For example, mining companies with Financial and
Technical Assistance Agreements (FTAA) may no longer enjoy the full
package of incentives since the FTAA is already a significant
incentive from the government, Hernandez said.
“Mining projects will be more favored if
[they] would locate to less developed areas, since this is a
mitigating factor of the government, thus we could give full
incentives in [such] case[s],” he said.
Under the Mining Act of 1995, incentives for
companies in this sector include duty free equipment importation,
real property tax exemption and net operating loss carry over, which
allows a company that incurs losses to carry these over to years
when it already earns an income, thus reducing its tax obligations.
Hernandez said that pioneer status under the
2008 IPP will be thoroughly studied, adding, “If this has
something to do with technology, [we] would assess whether this
technology is new, doable and beneficial to the country.”
Another sector under review is mass housing, he
said. Under the directive of the Housing and Urban Development
Coordinating Council (HUDCC), any housing unit priced P3-million and
below would be entitled to tax incentives and other perks.
Hernandez said the BOI is predisposed to
granting the same incentives under the 2008 IPP only to those
projects that would effectively address the housing backlog.
“The new requirements are still being
drafted. However, the qualification would already include the value
per unit through a per square meter basis among others,“ he said.
This move is on the back of the surge in mass
housing projects that met the P3 million and below ceiling and
availed of the fiscal incentives, but do not address the housing
needs of the low-income bracket.
“This move has been approved by Vice-President
Noli de Castro, who is the chairman of HUDCC,“ Hernandez said.
Another sector under review is the Information
and Communications Technology-enabled services.
“Does this sector still need government
support through full incentives?” Hernandez said.
He said stricter measures will help address the
issue of raising revenues for the government, which is hard-pressed
to balance its budget this year.
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