The Fiscal Incentives Review Board (FIRB) has adopted the framework for the grant of incentives to qualified industries under the government’s Strategic Investment Priorities Plan (SIPP).

As provided in the newly enacted Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law that rationalized the country’s corporate tax incentives for investors, Finance Secretary Carlos G. Dominguez III said this framework puts flesh into the SIPP.

The menu and length of incentives that would be offered to corporations or investors will depend on the tier classification of the enterprise applying for the investment perks, Dominguez said.

Trade Secretary Ramon Lopez and Finance Secretary Carlos G. Dominguez III

For instance, Tier 3, which covers sectors considered “critical to the structural transformation and industrial revolution of the economy” will receive the longest period of incentives.

The SIPP framework was drafted by the Department of Trade and Industry (DTI)-Board of Investments (BOI).

The three-tier structure of the incentives offered to priority investors is already contained in the CREATE Law.

After the adoption of the framework, Dominguez, who is also FIRB chairman, urged the DTI to identify at least two leading companies in each of the industry tier and determine what incentives should be offered to these potential investors.

“Let’s already identify these firms. Let’s take a couple in Tier One, a couple in Tier Two, and a couple in Tier Three, and let’s do the research on them. Then, offer them and ask them: ‘what will it take for you to come here?’’ Dominguez said during a recent FIRB meeting.

Dominguez said the investment promotion agencies (IPAs) can undertake these tasks.

Trade Secretary Ramon Lopez agreed with the proposal, which will now transform IPAs into “marketing arms” rather than for them to merely function as processing agencies for investment applications.

Also during its second meeting, the FIRB gave the go-signal to Dominguez’s recommendation to let the Board approve tax incentives for all investments amounting to over P1 billion per venture until the end of 2022.

After this period, the approval of incentives for investments of more than P1 billion but not more than P3 billion per venture will be delegated to the FIRB Technical Committee.

The FIRB also approved during the meeting a proposal by Department of Budget and Management (DBM) to put in place an appeals process for investment projects disapproved by the Technical Committee. Such actions may be appealed with the FIRB board proper.


Source: Manila Bulletin (https://mb.com.ph/2021/06/07/firb-adopts-framework-for-granting-incentives/?utm_source=rss&utm_medium=rss&utm_campaign=firb-adopts-framework-for-granting-incentives)