metromanila.politics.com.ph

House tax panel to recommend list of priority sectors for tax incentives

0 110

By Billy Begas

The House Committee on Ways and Means will recommend a list of sectors that should receive tax incentives from the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.

Committee chairperson and Albay Rep. Joey Salceda said the proposed transitional Strategic Investment Priorities Plan (SIPP) will “dissipate the cloud of uncertainty over tax incentives once and for all, and maximize the open investment policy we are adopting.”

The recommendation will be crafted by the committee with the help of the Department of Agriculture (DA), the Department of Science and Technology (DOST), and other concerned agencies.

The recommendation will be sent to the Fiscal Incentives Review Board this month.

The crafting of the recommendation was formalized during Monday’s hearing of the committee.

“The transitional SIPP is the bridge to a more carefully-crafted comprehensive SIPP. Right now, without this bridge, we are stuck only with the IPP 2020, which does not yet have a mechanism for the higher-tech tiers under CREATE,” Salceda said.

The CREATE Law provides longer tax incentives for sectors that are considered “higher-value” or “higher-tech.

“The transitional SIPP will also be a subset of the larger, more comprehensive SIPP, which I expect will have resolved issues being cited by the BOI, such as industry classification,” Salceda added.

According to Salceda, the delay in the release of the SIPP is due to disagreements between the agencies on the system of classification to be used for determining whether businesses fall under the categories of industries qualified for incentives.

The disagreement, Salceda said has delayed the SIPP for a year.

Under the CREATE law, export-oriented activities may qualify 4-7 years of income tax holiday (ITH) and 10 years of special corporate income tax (SCIT) pegged at 5% tax of the gross income.

Meanwhile, domestic-market enterprises under the SIPP may qualify for 4-7 years of ITH and 5 years of SCIT for enterprises with investment capital not less than P500 million.

Extra tax incentives of 2 years of ITH are available for locators in areas recovering from disaster, and 3 years of ITH for those relocating from the National Capital Region.