MANILA -- The incentives offered under the Tax Reform for Attracting Better and High-Quality Opportunities (TRABAHO) Bill are better than perks offered currently by investment promotion agencies (IPAs), an official from the Department of Finance (DOF) said.
During the forum of Italian Chamber of Commerce of the Philippines, Inc. (ICCPI) on Tuesday, DOF Assistant Secretary Antonio Joselito Lambino II said incentives in the TRABAHO Bill will still be attractive to investors. “We are not so interested in the status quo because we want to give better,” Lambino said. “We want to keep granting incentives for the right reasons.”
Lambino urged existing investors, particularly foreigners, to explore the incentives menu under the second package of the Tax Reform for Acceleration and Inclusion or the TRAIN 2. He cited perks that will be included in the menu such as depreciation allowance of qualified capital expenditure -- 10 percent for buildings and 20 percent for machineries.
Investors can also choose incentives for additional deduction of up to 100 percent for research and development and training; 50 percent for labor expense; 100 percent for country-wide infrastructure development; 50 percent for reinvestment allowance to manufacturing industry; and 50 percent for domestic input expense.
The government will also offer enhanced net operating loss carry-over (NOLCO) for five years and exemption from customs duty on imported capital equipment and raw materials.
It will also give value-added tax (VAT) incentives to economic zones and Freeport-registered exporting enterprises that can meet 90 percent of sales threshold – VAT exemption on importation and VAT zero rating on domestic purchases.
The granting of perks can be extended for another two years for registered activities relocating outside Metro Manila and selected urbanized areas adjacent to Metro Manila; agribusiness projects of registered enterprises located outside Metro Manila and urban areas; and projects located in less developed areas or those recovering from armed conflict or a major disaster.
At the sidelines of the event, Lambino clarified that the TRABAHO Bill will not remove any IPAs, as these agencies will be implementing the Strategic Investment Priorities Plan (SIPP).
The SIPP will be a single list of priority sectors that the government targets to provide with incentives. “IPAs would actually be approving 90 to 95 percent of applications, but from a single menu and not IPA to IPA menu,” the DOF official said.
“The SIPP, on the other hand, would be quite broad. Based on what BOI (Board of Investments) said, every sector that received incentives is included in the first SIPP. So that doesn’t remove anyone at this point,” he added. (PNA)
