The Board of Investments seeks the inclusion of an expanded and flexible menu of incentives in the second package of the administration’s comprehensive tax reform program.
BOI Managing Head and Trade Undersecretary Ceferino Rodolfo told reporters that these incentives should heighten and sustain the flow of investments in the Philippines while enhancing the competitiveness of industries.
Rodolfo mentioned that the BOI, under the Executive Order 226, can only grant six-year income tax holiday (ITH) to pioneer companies and four-year ITH to non-pioneer firms and duty-free importation of capital equipment.
He said the government can introduce other incentives — not necessarily increasing the value of perks given to registered firms — which are responsive to the need of industries.
He cited that in order to attract talents in Thailand, its government grants exemption on income tax for certain categories of skilled professionals in specific sectors on top of its 10-year ITH and other incentives.
The official said if the Philippines has competitive advantage in its talents while having disadvantage on higher power cost, the country can hike the labor cost while giving incentives on power. In that way, expenses will be offset.
“We want to introduce menu of incentives that are more flexible and responsive to the needs of businesses, industries,” Rodolfo said in Filipino.
“Not in terms of increasing the amount (of perks), but make the tool more responsive,” he stressed.
Moreover, Rodolfo mentioned that the Department of Trade and Industry (DTI) and the Department of Finance (DOF) created a technical working group to synchronize data and principles as the government moves toward the second package of CTRP, which is focused on rationalizing incentives.
The trade official noted that the both agencies agreed to the principle that granting of incentives should be targeted, time-bound, transparent, and performance-based.
He said BOI’s granting of incentives is based in these principles even before the administration pushes for new tax regime. (PNA)
