Projects with tax perks reach P694 billion

MANILA, Philippines — The Cabinet-level Fiscal Incentives Review Board (FIRB) has approved 39 projects worth P694 billion since its creation in 2021 following the enactment of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.

Based on the latest FIRB Imprint, the total investment capital from approved priority activities with incentives under the CREATE Law has already reached P693.6 billion.

Approved applications covered August 2021 up to the end of the first semester this year.

In the first half of 2023 alone, 22 projects with a combined investment capital of P279.3 billion were greenlighted.

The projects include manufacturing plastic products, motor vehicles, reducer gears for robotic applications and home appliances, rubber processing, and operational processing of financial product transactions.

These also qualify under Tier 1 of the 2022 Strategic Investment Priority Plan, which covers the production and manufacturing of export products with an export requirement of at least 70 percent of its total output.

To recall, CREATE cut the corporate income tax rates to make them comparable with the ASEAN region.

The law also adopted a simpler and more effective fiscal incentives system, ensuring that incentives are performanced-based, time-bound, targeted, and transparent.

Pursuant to the CREATE Law, the FIRB is mandated to oversee the grant and administration of incentives of investment promotion agencies (IPAs).

Under the law, IPAs approve the incentives of projects below P1 billion, while the FIRB selects the tax perks for business activities above P1 billion.

Of the total 39 approved projects, the majority or 24 are located in Luzon. Four projects are in Visayas, three in Mindanao, and eight in multiple locations.

About 62 percent or P431.5 billion of the total project investment capital is in the information and communication technology sector.

This is followed by transportation and storage with P122 billion and manufacturing with P83.7 billion.

Others include energy, economic zone operation, mass housing, tourism, human health activities, and IT-business process management.

FIRB is expecting at least 28,040 jobs to be generated from the projects.