BOARD OF INVESTMENTS (BOI) READIES NEW RULES ON TAX PERKS
MANILA, JUNE 13, 2006 (STAR) By Marianne V. Go - The Board of Investments (BOI) is drawing up a new set of policy guidelines for the grant of income tax holiday (ITH) incentives to firms and projects seeking registration with the investment agency.
A possible casualty may be telecommunications investments which may no longer be entitled to ITH incentives since they are market and technology-driven.
Over a 10-year period from 1995 to October 2005, ITH incentives availed by BOI-registered firms has amounted to P28.267 billion.
Based on draft guidelines, the BOI would limit the extension of ITH specifically to all projects by micro and small enterprises with total assets of P15 million and below.
Likewise, full ITH incentives would also be given to all export-oriented projects.
However, the BOI plans to limit the grant of ITH incentives to expansion projects unless the project is specifically identified as entitled to full incentives.
Areas identified with full incentives under the Investment Priorities Plan (IPP) are agribusiness in support of the Agriculture Fishery Modernization; healthcare and wellness products and services because it is considered an infant industry; information and communications technology, electronics and motor vehicle products because they are export-oriented.
Likewise, investments in energy projects, specifically those involving power generation using new and renewable energy (NRE) source such as biomass, waste to energy conversion, solar, wind, geothermal, hydro and tidal, are entitled to full incentives because such projects reduce dependence on imported fuel and provide an alternative source of energy.
However, the BOI may still decide on a case-to-case basis on some energy projects if the power generation project uses non-renewable energy sources, involves power transmission and distribution and involve activities using energy technologies leading to energy efficiency and conservation.
Infrastructure investments are entitled to full incentives if they are in mass housing with selling prices of P500,000 per unit and below because they affordable to the low-income group.
Similarly, infrastructure investments in transport systems are entitled to full incentives because they develop the transport system.
Investments in shipbuilding and shipping, as well as in machinery and equipment, raw materials and intermediate inputs in support of the activities listed in the IPP are also entitled to full incentives.
Areas where the ITH would be determined on a case-to-case basis are infrastructure involving logistics, build-operate-transfer projects, land-based transport system and mass housing.
Likewise, investments in tourism, jewelry and fashion garments would be evaluated on a case-to-case basis.
Chief News Editor: Sol Jose Vanzi
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