The Fiscal Incentives Review Board, upon the recommendation of the Board of Investments, granted tax incentives to four telecommunications companies, including Converge ICT Solutions Inc. for its nationwide rollout of fiber optic network for high-speed broadband services interconnecting the country from Luzon to Mindanao.
Converge’s fiber broadband rollout, with total project cost of P150.6 billion, received four years of income tax holiday, followed by five years of enhanced deductions and 11 years of duty exemption on importations of capital equipment, raw materials, spare parts or accessories from the date of registration under the Strategic Investment Priority Plan.
The company, led by businessman Dennis Anthony Uy, made commitments in its tax incentive application such as providing better and cheaper internet access in the country’s unserved and underserved communities and strengthening interconnectivity in these areas where the connection is normally slow and unsteady.
“We expect Converge to deliver on its performance commitment of faster and cheaper Internet access in remote localities as this will not only address our pain points with regard to connectivity but also provide more employment opportunities to our people in rural areas,” Finance Secretary and FIRB chairman Carlos Dominguez III said in a statement.
Converge ICT booked a net income of P1.97 billion in the first quarter, up by 27.9 percent from a year ago on the back of higher subscriber base. Consolidated revenues went up 39.7 percent to P7.74 billion from P5.54 billion.
The Strategic Investment Priority Plan determines the priority industries, projects and activities that can be granted fiscal incentives by the government under the Corporate Recovery and Tax Incentives for Enterprises Act.
The FIRB also approved tax incentives for three telecommunication tower companies including SkyTowers Infra Inc., Frontier Tower Associates Philippines Inc. and Transcend Towers Infrastructure Philippines Inc.
The applications of the three tower companies were also endorsed by the BOI.
Having a combined total project cost of P78.2 billion, these three two companies were granted with the same incentives given to Converge, but on condition that all of their towers would be built and located in areas that now lack service.
“The approval of these projects is urgent, given the current gap in the number of towers needed to service our population,” said FIRB secretariat head and DOF assistant secretary Juvy Danofrata.
“We are optimistic that these approved applications will pave the way for our country to finally have improved connectivity and more quality service,” Danofrata said.