PPP projects to get tax perks under 2011 IPP

MANILA, Philippines –  Projects under the government’s Public Private Partnership (PPP) program will receive income tax holidays (ITH) under the 2011 Investment Priorities Plan (IPP).

In a draft copy of the 2011 IPP obtained by reporters, the new IPP will give ITH to projects under the PPP program of the government. This is the only new addition to the IPP list. However, several industries that have been receiving tax breaks will no longer enjoy this benefit.

Industries that will no longer enjoy ITH under the draft 2011 IPP is the contingency list that involves job creation or saving, disaster prevention projects, cement, iron and steel.

The move of the government to streamline the IPP is in line with its program to increase revenues through tax collection.

The draft 2011 IPP covers 11 preferred activities. These are agriculture/agribusiness and fishery, creative industries, shipbuilding, mass housing, energy, infrastructure, research and development, green projects, tourism, strategic projects and PPP projects.

The agriculture and fishery sector covers the commercial production and commercial processing of agricultural and fishery products including their byproducts and wastes. This also covers agriculture and fishery related activities such as irrigation, post-harvest, cold storage and blast freezing facilities.

The creative industries covers business process outsourcing (BPO), information technology (IT) and IT enabled services and film and performing arts productions.

Shipbuilding covers the construction and repair of ships and shipbreaking.

Mass housing covers the development of low-cost mass housing.

Energy covers the exploration, development, and/or utilization of indigenous energy sources and clean coal technology.

Infrastructure covers transport, water, logistics, waste management facilities, physical infrastructure like tollroads, highways, railways and roads, and pipeline projects for oil and gas.

Research and development covers the establishment of testing laboratories, Centers of Excellence and skills development training institute.

Green projects covers the manufacture of goods, the utilization of which would lead to either the efficient use of energy, natural resources or raw materials, minimize/prevent pollution or reduce greenhouse gas emissions. This is the second year green projects are included in the IPP. No one has availed of this particular incentive yet.

Tourism covers the establishment of tourist accommodation, facilities, resorts, retirement villages and healthcare and wellness facilities.

Strategic projects are those that exhibit very high social economic returns that will significantly contribute to the country’s economic development. This also covers motor vehicle assemble and manufacture of parts and components.