Villar pushes fiscal incentives measure

MANILA, Philippines - Sen. Cynthia Villar is pushing for the passage of a measure that will grant fiscal and non-fiscal incentives and promote foreign and domestic investments in the country.

Villar has filed Senate bill number 35, also known as “The Investments and Incentives Code of the Philippines,” in a bid to harmonize and simplify the programs and policies on investments. 

She said the bill provides two types of performance-based incentives to qualified enterprises.

The senator referred to direct tax incentives such as net operating loss carryover (NOLCO)  and indirect taxes like zero percent value added tax on sales, exemption from taxes and/or customs duties on importation of capital equipment, raw materials and source documents and wharfage duties and export tax.

NOLCO is an accelerated depreciation and double deduction for training expenses and double deduction for research and development.

Villar said income tax holiday or reduced income tax is still in place to qualified enterprises.

However, qualified enterprises that avail of the income tax holiday or reduced income tax, or the five percent tax rate on Gross Income Earned, shall not qualify for the performance-based direct tax incentives.

She said varying incentives are also provided to different registered enterprises such as export, domestic and strategic enterprises and those located in economic zones and free zones. 

Special incentives are likewise afforded to registered domestic enterprises located in the identified 30 poorest provinces or less developed areas.

Villar also bats for the creation of an Investment Promotion Action Center (i-PAC) that will serve as a melting pot for information from concerned agencies and as a link to fast track dealings with them.  

The Board of Investments (BOI), upon consultation with the Office of the President, concerned IPAs and appropriate government agencies and the private sector, shall formulate the Investment Priorities Plan  (IPP) to be submitted to the President for approval. 

The senator said the activity shall be covered by the current Medium Term Philippine Development Plan (MTPDP) and Medium Term Philippine Investment Plan (MTPIP) or its equivalent.

She said the activity should also satisfy the following conditions: substantial amount of investments, considerable generation of employment, use of modern or new technology and installation of adequate environment systems.

She said the BOI or IPA may suspend the availment of incentives of registered enterprises when there is probable cause to believe that a registered enterprise violated its registration terms and conditions.

Considering the serious need for congruent laws on investments and incentives, Villar sought for the early enactment of this bill.