Acting DTI head fears delay in passage of incentives package

Trade and Industry officer-in-charge Thomas Aquino expressed doubts yesterday on the passage of the incentives package contained in the Amendments of the Omnibus Investment Act before Congress goes on recess on Feb. 12.

" A delay in the passage of the incentives package would set back the country by at least two years in generating new investments especially for the booming electronics sector," Aquino said.

He said the Department of Trade and Industry (DTI) is still trying to reach a compromise agreement with the bicameral conference committee to speed up the passage of the bill.

The government is trying to sweeten the incentives package to be able to attract more foreign investors.

As part of the so-called new package, the government is proposing a longer income tax holiday from the current four to six years to eight to 12 years.

The government is also willing now to allow the tax and duty-free importation of capital equipment. The incentives also include net operating loss carry-over and accelerated depreciation.

The DTI currently foresees three emerging scenarios on the incentive package. One would be a 12-year income tax holiday for companies which need it or which can meet the minimum capital requirement of $25 million. Another scenario will be for an eight years income tax holiday while the third scenario will be a tailor-made package for big ticket projects which could ask for specific incentives they prefer.