Government to trim IPP list this year

MANILA, Philippines - The government is mulling the removal of some of the existing incentives programs like the employment generation clause and the disaster mitigation project as part of an effort to streamline its incentives list this year.

In an interview with reporters, Board of Investments (BOI) executive director Efren Leaño said that they are now in the process of listing projects that will still be in the 2011 Investments Priorities Plan (IPP).

The 2010 IPP has some clauses that may be removed from this year’s list like the employment generation - which was included during the crisis. The clause for incentives for cement clinker and the disaster mitigation projects may also be removed because no one has availed of this incentive.

The environmental clause, which gives tax breaks to green projects, will still remain this year even if no one registered. “It has only been a year. We are hoping that investors will take on green projects this year” Leano said.

Likewise, Leano said that the incentives for mass housing will be maintained because of the backlog in houses. In 2010, the incentives for mass housing was supposed to be removed but was retained after typhoons Pepeng and Ondoy devastated Metro Manila and its surrounding provinces. However, there has been talks of limiting mass housing projects to areas outside Metro Manila only to decongest the metropolis.

The 2011 IPP will have a smaller listing in terms of fiscal incentives as the government continues to look for ways to increase tax collection. Leano said that the 2011 IPP will have a smaller list of inclusions for next year.

“That is the directive of the Secretary (Gregory L. Domingo) that incentives will be given to those who need it only,” Leano said.

Leano said they will be calling a meeting of all concerned government agencies to ask what specific sectors need tax perks in order to encourage investments. He said the meetings will begin next month.

“We want to consult all of them so that when we finally come up with the IPP we will not receive any complaints that we did not give incentives to a sector that needed it,” Leano explained.

Earlier, Domingo said that investment incentives on industries that attract many businesses will be removed in order to make way for a more robust revenue collection by the government. He said the incentives on industries that receive sizeable investments must be removed. He said that if investors will come in anyway, then there is no need to provide tax breaks.

“The incentives should be rationalized. Incentives should not be given to just any industries you want to give incentives to industries where you think we cannot get those industries without those incentives but if those industries as coming in anyway or setting up shop then why do you have to give incentives,” Domingo said.