Two more industries to get tax perks under new IPP

MANILA, Philippines -  The final draft list of industries that will be given income tax holiday (ITH) has ballooned to 13 from an initial draft list of 11 industries in the Investment Priorities Plan (IPP).

In an interview, Board of Investments (BOI) managing head Cristino L. Panlilio said that they have listed as separate industries the mining, motor vehicle and transportation sectors. The draft IPP will be finalized today and is expected to be submitted to Malacañang very soon.

Mining is already in the mandatory list but Panlilio said that they have decided to also list it in the priority sector because some incentives in the IPP are not in the Mining Act. However, Panlilio said he is not sure what the different incentives are.

“Mining is very important especially for countryside development. We are enjoining them to support the mining industry provided it is responsible mining,” Panlilio noted.

On the motor vehicle and transportation, Panlilio said they decided to put a separate listing because this industry contributes 10 percent of the country’s gross domestic product (GDP). Aside from vehicle manufacture, Panlilio said that there are 1.5 million jeepneys in the country. “This industry has two components the manufacture and service,” Panlilio said.

Originally, the motor vehicle was in the strategic investment category of the IPP. However, Toyota Motor Philippines wrote to BOI asking why it is under the strategic investments.

TMP vice president Rommel T. Gutierrez said that they wrote BOI to ask for clarification on the amount of investments necessary to receive ITH.

Gutierrez said that under the IPP, the auto was included in the strategic investments. Normally, strategic investments are large scale investments. “We just wanted clarification on the matter,” Gutierrez said.

Panlilio said that auto firms need not infuse large amounts in order to gain ITH under the IPP.

Panlilio said that they will still follow the Motor Vehicle Development Plan (MVDP) which said that auto investments worth $8 million will receive ITH.

“Strategic investments can be small or medium scale,” Panlilio noted.

Panlilio said that they will maintain incentives for the auto sector because it contributes to the GDP. “We want the auto sector to react fast to the economic changes that is why we want to provide them incentives.”