Environmental protection devices exempt from tax

The Department of Environment and Natural Resources has issued guidelines which exempt companies from paying real property tax on machinery and equipment used for air pollution control and environmental protection.

The guidelines under Department Administrative Order 53 as provided for by the National Revenue Code of 1997 also stated that industrial firms can also avail of tax incentives when putting up anti-air pollution devices to reduce air emission. Tax incentives on the said devices can also be availed of by companies operating inside special economic and free port zones.

This was issued so that establishments installing air pollution and control devices will greatly benefit from these tax incentives as they help the government in the campaign to clean the air.

The applicant must secure a permit to operate anti-air pollution devices from the Environmental Management Bureau, which shall serve as eligibility for the availment of tax incentives.

Companies may deduct from their gross income a reasonable depreciation allowance for the wear and tear of existing air pollution devices.

A qualified enterprise may avail of tax incentives provided for under existing laws subject to the rules and regulations of concerned incentives-administering agencies such as the Board of Investments of the Department of Trade and Industry and the Department of Finance.

To discourage companies from engaging in irregularity, the Environmental Management Bureau will conduct technical inspections and sampling tests to verify if the device is properly installed and effectively operating in accordance with existing environmental regulations. - Jasmin R. Uy