MANILA, Philippines - The Board of Investments (BOI) will tighten the rules on the grant of tax incentives in an effort to raise more income for the government.
In an interview with reporters, Board of Investments (BOI) executive director Lucita P. Reyes said that the BOI will now tighthen the rules on the grant of tax holidays.
“We will be stricter in giving income tax holidays (ITH),” Reyes disclosed. Aside from being part of the Investments Priorities Plan (IPP), the investments must also pass two criteria-- job generation and measured capacity.
Reyes said that the investment must be able to help more people and create more jobs. At the same time, Reyes said that the investment's measured capacity must be considered.
Measured capacity means that the investment will help the country reduce its dependence on foreign imports.
“These are prequalifications and the employment and measured capacity is either or,” Reyes said.
The government has already streamlined the list of the 2011 IPP as it removed some components like incentives on disaster mitigation.
In a separate interview, BOI Managing Head Cristino L. Panlilio said tha the incentive for this particular project was removed because disaster prevention projects does not create many new jobs.
Industries that will no longer enjoy ITH under the draft 2011 IPP is the contingency list that involves job creation or saving, disaster prevention projects, cement, iron and steel.
The move of the government to streamline the IPP is in line with their program to increase revenues through tax collection.
The draft 2011 IPP covers 11 preferred activities. These are agriculture/agribusiness and fishery; creative industries; shipbuilding; mass housing; energy; infrastructure; research and development; green projects; tourism; strategic projects and Public Private Projects (PPP) projects.
Meanwhile, pursuant to Section 401 of the Tariff and Customs Code of the Philippines, as amended, the Tariff Commission will conduct public hearing on the proposed Executive Order (EO) extending EO 528 entitled “Reducing the Rates of Duty on Capital Equipment, Spare Parts and Accessories Imported by BOI Registered New and Expanding Enterprises”.