By Kris M. Crismundo
MANILA, Nov 22 (PNA) –The Board of Investments (BOI) has revised the rules in implementing the 2014 Investments Priorities Program (IPP)in a move to create a more productive and competitive business environment.
IPP is the government’s list of preferred economic activities that are eligible for fiscal and non-fiscal incentives.
Under the 2014 IPP, the listed activities are now valid for three years, instead of creating new IPP every year, to promote consistency of policies for investors. However, the new IPP is still subject to annual review as mandated by law.
The 2014 IPP is more detailed than the previous IPPs as it now indicated specific projects under a sector that will be given incentives. Aside from specifying which investments will be subjected to perks, the new IPP also gives geographical consideration of projects in order to promote economic activities, particularly in areas which are less developed.
The preferred activities in IPP which will support the Philippine Development Plan (PDP) 2011-2016 include manufacturing; agribusiness and fisheries; services; economic and low-cost housing (both horizontal and vertical); hospitals; energy; public infrastructure and logistics; and public-private partnership (PPP) projects.
The Board’s new guidelines provide that the basis of net income qualified for income tax holidays (ITH) will be limited to 110 percent of the firm’s projected revenue as presented to BOI.
However, if the company falls short or exceeds the projected revenues for the project, BOI may adjust the project’s ITH availment proportionately.
The new IPP guidelines also provides that “ITH shall only be applicable to revenues on sales generated/services rendered to other enterprises subject to the condition that 70 percent of the revenues are generated from non-related entities.”
The new IPP also encourages enterprises to adopt Inclusive Business (IB) strategy that eyes to provide income and decent jobs for the low-income segment of the society.
Department of Trade and Industry (DTI) Executive Director for Industrial Policy Development Corazon H. Dichosa said the BOI will publish the 2014 IPP before the year ends and start the implementation early in 2015. (PNA)