The Board of Investments (BOI) is finalizing this month the implementing rules and regulations (IRR) of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act to provide clarity to investors.
In a recent forum, BOI executive director Corazon Dichosa said the Strategic Investments Priorities Plan (SIPP) will be finished by January as consultations with the private sector are ongoing.
The SIPP represents the country’s investment plan that contains the list of priority industries and investment promotion and facilitation activities for all investment promotion agencies. It will define the coverage of industry tiers and provide the conditions to qualify the activities.
The SIPP gives fiscal and non-fiscal support to industries that create high-skilled jobs that can supply to domestic and global value chains, increase the sophistication of products and services that are produced domestically, expand domestic supply and reduce dependence on imports and attract significant foreign direct investments.
The BOI, in coordination with the Fiscal Incentives Review Board, IPAs, other government agencies administering incentives and private sector will formulate the SIPP.
New applications and expansion of projects are covered by the provisions under the CREATE Law using the current IPP, which guarantees these projects Tier 1 or basic incentives.
Government considers CREATE, signed last March 26, a major legislation as it provides longer time period for enjoying income tax holidays (ITH) and subsidies. ITH extends from four years to seven years, depending on the level of technology and location of the project.
For exporters, this will be followed by another 10 years of either enhanced deductions or a special operating income tax of 5 percent tax on gross income earned in lieu of all other taxes and for domestic oriented enterprises, this is followed by five years of enhanced deductions.
CREATE removes the nationality and export bias. – Irma Isip
