2013 IPP To Tighten Rules

The 2013 Investment Priorities Plan (IPP) would be just a carry over of last year's list of preferred economic activities but there could be tightening in the specific implementing rules and regulations (IRR) to avoid future complaints on the registration of enterprises with tax incentives.

This means the 13 Preferred Activities listed in the 2012 IPP would remain intact in the 2013 IPP. These activities include agriculture/agribusiness and fishery, creative industries/knowledge-based services, shipbuilding, mass housing, iron and steel, energy, infrastructure, research and development, green projects, motor vehicles, strategic projects, hospital/medical services, and disaster prevention, mitigation and recovery projects.

The IPP is an annual list of preferred projects that are entitled to tax and fiscal incentives by the government, the most juicy of which is the income tax holiday which could run for 6 to 8 years.

The Board of Investments, however, plans to tighten the specific IRRs on these preferred activities. One of the conditions could be an endorsement from another government agency before a project, which is considered contestable, be acted upon by the BOI.

An official said that on some areas like energy, an endorsement from the Energy Department is needed. An endorsement from the Department of Tourism was also a requirement for a tourism project to be granted incentives when tourism was still listed in the previous IPPs. The same endorsement is sought from the Maritime Industry Authority (MARINA) for projects falling under its mandate.

It could be recalled that the National Federation of Hog Farmers and Bounty Fresh have protested a BOI decision to grant incentives to the P2.326 billion domestic-oriented project of Thai-owned Charoen Pokphand Foods Philippines Corporation (CPFPC).

The domestic industry said there is no need to grant incentives to CPFPC because there is enough capacity to produce the local requirements of hogs, poultry and feeds. The industry is also largely composed of backyard operators.

According to a source, the BOI would now require an endorsement from the Department of Agriculture for agri-related projects to be approved by the BOI.

The domestic industry, however, has not filed a formal protest nor an appeal over the BOI decision to grant the Thai firm of tax incentives but it only sought some information from the BOI. This does not preclude though the local industry to file for an appeal or bring the case to the Office of the President. (BCM)

Article 36 under Chapter 111 of the Omnibus Investments Code provides that ''Any order or decision of the Board shall be final and executory after thirty (30) days from its promulgation. Within the said period of thirty (30) days, said order or decision may be appealed to the Office of the President. Where an appeal has been filed, said order or decision shall be final and executory ninety (90) days after the perfection of the appeal, unless reversed.''

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