The Board of Investments (BOI) is proposing changes to the eligibility to incentives of economic zone developments.
While the amendments are meant to encourage the development of more ecozones in the country, BOI managing head Ceferino Rodolfo said the changes will also restrict the entitlement of incentives.
Rodolfo said the BOI has proposed to explicitly state in the Investment Priorities Plan (IPP) which is the transitional list of economic activities entitled to incentives for the Strategic IPP, that the development and operation of export zones and freeport zones can be registered in the Philippine Economic Zone Authority (PEZA) and other investment promotion agencies (IPAs).
Rodolfo said this is necessary as the the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act will only allow registration of projects listed in the IPP/SIPP.
“In the past, all activities in declared ecozones can be registered in PEZA and other IPAs as long as they are within the zone. With CREATE, these activities have to be in the IPP/SIPP,” Rodolfo said.
He said mere constructing of, say a building within an ecozone, will not entitle the company to incentives.
He added revenues generated by the registered company from the domestic market cannot be included for entitlement of perks.
Rodolfo cited examples for exclusion the sales generated from commercial establishments that are located in the building.
Angelica Cayas, BOI governor, in a presentation at a forum yesterday, said the BOI, in consultation with other IPAs, proposed to amend the specific guidelines of export activities under the 2020 IPP/SIPP to include in the list the development and operation of ecozones and industrial parks and buildings for exporters.
The proposed amendment will also cover the development of IT buildings located outside the National Capital Region which are declared as an ecozones or within export or freeport zones with a minimum contiguous area of 10,000 square meters.
Another restriction is that 70 percent of the leasable/saleable should be dedicated to exports registrable in the SIPP.
Phased development is allowed as long as the whole project is completed within five years. – Irma Isip
