BOI strips microenterprises of tax and other incentives
Published on Wednesday, 06 March 2013 20:37 Written by InterAksyon.com
The Board of Investments (BOI) has removed microenterprises from the
list of businesses that can qualify for tax and other perks under this
year's Investment Priorities Plan (IPP). A microenterprise is a business
that has assets of under P3 million and so is the most feasible that the
poor can put up.
The removal of microenterprises from the list is one of the changes
introduced in the draft 2013 IPP. According to the draft plan, project
cost also has been removed from the list of criteria in bestowing
"pioneer" status to a business venture. A project that qualifies as
"pioneer" gets the most generous tax and non-tax incentives.
The BOI also tweaked several provisions of the specific guidelines for
agriculture, mass housing, energy, transport, infrastructure, motor
vehicles and tourism projects.
During Wednesday's public consultations on the draft 2013 IPP, BOI
Executive Director Lucita P. Reyes said this year's investment blueprint
is a "carryover" of the 2012 version as far as the preferred activities
and mandatory lists are concerned.
Like the 2012 IPP, the 2013 plan includes 13 investment areas in the
preferred activities list, namely, agriculture/agribusiness and fishery;
creative industries/knowledge-based services; shipbuilding; mass
housing; iron and steel; energy; infrastructure and public-private
partnership (PPP) projects; research and development; green projects;
manufacture of motor vehicles; strategic projects; hospital/medical
services; and disaster prevention, mitigation and recovery projects.
The mandatory list, as provided for by various laws, covers the
following industries: industrial tree plantation; exploration, mining,
quarrying and processing of minerals; publication or printing of
books/textbooks; refining, storage, marketing and distribution of
petroleum products; ecological solid waste management; clean water
projects; rehabilitation, self-development and self-reliance of persons
with disability; renewable energy; and tourism.
The IPP also provides incentives to export activities, as well as growth
sectors in the Autonomous Region in Muslim Mindanao.
But the 2013 IPP will no longer accept applications for
microenterprises, as incentives are already available under the barangay
microbusiness enterprise (BMBE) law, according to the BOI.
"In previous years, we included microenterprises since some LGUs [local
government units] were not implementing the BMBE law. We even provided a
special window for microenterprises and waived application fees," Reyes
said.
With regards to applicants for pioneer status, which may enjoy up to
eight years of income-tax holiday (ITH), the 2013 IPP took away the
magnitude of investment as a criterion, Reyes said. The previous IPPs
provided thresholds in project cost for pioneer projects.
Other changes in the 2013 IPP guidelines are:
o Projects with carbon-emission credits have to qualify under any of the
IPP listings but not as export-oriented activities;
o All agriculture projects should secure endorsement from the Department
of Agriculture (DA), and the BOI must also seek opinion or comment from
the DA before approving a project;
o New mass-housing projects outside the National Capital Region (NCR)
and Metro Cebu will be entitled to a three-year ITH, while new and
expansion projects within NCR and Metro Cebu to have a two-year ITH;
o Energy projects to be given one year from date of registration to
submit financial closure;
o For air-transport projects, revenues entitled to ITH will be limited
to passenger and cargo revenues, and Civil Aeronautics Board
certification is required;
o For water-transport projects, minimum lease period increased to five
years;
o For land-transport projects, alternative fuel buses were included;
o Ports, railways and toll ways transferred from infrastructure list to
PPP program list, upon request of the PPP Center for easier monitoring
of projects;
o Motorcycle assemblers must allocate half of the $2-million investment
requirement to manufacturing equipment; and
o No more ITH for hotels and resorts with accommodation facilities in
Boracay Island, Cebu City, Mactan Island and NCR, given the absorptive
capacity of these areas.
Reyes said the manufacturing road maps that the government and the
private sector are jointly developing will be integrated in next year's
IPP. These road maps will be part of a comprehensive national
manufacturing strategy, she said.
The drafting of the 2014 IPP will start as early as August this year,
Reyes said.
Under Executive Order 226, the annual IPP should be submitted to
Malacañang in March, but Reyes said the BOI aims to have the President
Aquino approve the 2014 IPP before year-end so it can be implemented by
January next year.
The BOI last year generated P360.35 billion worth of projects, slightly
lower than the previous year's P368.93 billion.
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