2020 IPP to remain transitional list

MANILA, Philippines — The 2020 Investment Priorities Plan (IPP) could serve as the transitional list of sectors to be promoted for investments and qualified for incentives while the Strategic Investment Priority Plan (SIPP) is being crafted under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law, the Board of Investments (BOI) said.

“With the CREATE law becoming effective (April 11), the intention is to provide at least the most basic incentive under CREATE—provided they qualify—to sectors under IPP as the 2020 IPP will serve as the transition SIPP until end-December 2021 or when the new SIPP is approved,” Trade Secretary and BOI chairman Ramon Lopez said in a Viber message to reporters.

Under CREATE, the BOI is mandated to craft the SIPP, in coordination with the Fiscal Incentives Review Board (FIRB), investment promotion agencies, other government agencies administering tax incentives, and the private sector, to be submitted to President Duterte for approval.

To be formulated every three years, the SIPP will identify priority projects or activities that will receive incentives from the government, as well as the period of availment.

Eligible enterprises can avail of four to seven years of income tax holidays, followed by 10 years of special corporate income tax or enhanced deductions (ED) for exporters or five years ED for domestic market enterprises.

“During the extensive consultations for CREATE undertaken by the DOF (Department of Finance) and DTI (Department of Trade and Industry) BOI, we have assured stakeholders—particularly the investors and the legislators—of continuity as the IPP will serve as the initial platform in transitioning from EO (Executive Order) 226,” Lopez said.

He also said the 2020 IPP has been extensively consulted among private and public stakeholders, including the DOF and National Economic and Development Authority.

“It was crafted as a tool to hasten V-shaped recovery being anchored on the rebuild strategy and provides teeth to the Balik Probinsya Program,” he said.

Under the 2020 IPP, activities that can qualify for incentives include projects addressing the COVID-19 pandemic, those creating job opportunities in the countryside;  manufacturing; agriculture, fishery, forestry; strategic services including integrated circuit design, creative industries, and maintenance, repair and overhaul of aircraft; health care and disaster risk reduction management services; mass housing; infrastructure and logistics including local government unit – public private partnership projects; innovation drivers; inclusive business models; environment or climate change-related projects; energy; export activities; as well as those covered by special laws.

Lopez said the list would be up for discussion along with the implementing rules and regulations for the CREATE during the first meeting of the FIRB.

The FIRB is chaired by Finance Secretary Carlos Dominguez with Lopez as co-chairperson.

“We want CREATE to be implemented as soon as possible as it is key in the economic recovery efforts despite the pandemic,” Lopez said.