The Department of Trade and Industry plans to include two major economic activities in the proposed 2020 Investment Priorities Plan and grant them fiscal incentives.
Businesses or activities that will help mitigate the pandemic will likely receive incentives as well as those covered by the “Balik Probinsya” program.
“These two broad categories are proposed to be incentivized under the transitional IPP. They are likely to benefit from the current incentives under EO 226 or the Omnibus Investment Law,” said Trade Undersecretary Ceferino Rodolfo.
The 2020 IPP will serve as the transitional IPP to the proposed Corporate Recovery and Tax Incentives for Enterprises Act, or CREATE, which is the repackaged Corporate Income Tax and Incentives Rationalization Act, or CITIRA.
The two inclusions are considered vital to boost the country’s economy, which is composed mainly by micro, small and medium enterprises.
Businesses that will be considered COVID-19 activities are the production of face masks, ventilators and other health-related items like personal protective equipment.
“With the Balik Probinsya, we are pushing for (the) power to declare incentives for activities under this program, especially for least developed areas ( LDAs). We know how difficult it is to declare an area as LDA, even during the time of Typhoon Yolanda, where large areas where stricken down by the typhoon due to the very stringent guidelines on this,” said Rodolfo.
He added the Board of Investments planned to grant incentives to Balik Probinsya projects so these could avail of a longer income tax holiday.
Along with Finance Department and the National Economic and Development Authority, the Trade Department is optimistic the 2020 IPP would be approved soon.
“What we have agreed on earlier was that the 2020 IPP will be the transitional IPP in anticipation of CREATE and the Special Investment Priorities Plan (SIPP). The things were outran by the COVID outbreak that delayed the approval. We withdrew it and resubmitted two weeks ago with the two major categories inserted,” Rodolfo said.
Manufacturing activities that are COVID- related receive incentives under the Bayanihan to Heal as One Act.
The law gave President Rodrigo Duterte the power to realign part of the government’s budget to cover all COVID-related responses.
“Since Bayanihan is set to expire by June, we really need to include the two categories in the new IPP which is basically a carry-over of the 2017-2018 IPP,” Rodolfo said.