THIS YEAR’S list of investment areas where businesses will be eligible for tax perks will come into effect within the month, after Malacañang finally published it in newspapers yesterday.
This, as the implementing rules of the 2011 Investment Priorities Plan (IPP) should be out by next week, a Trade official said.
The annual plan is usually released in June.
This year’s IPP -- under Memorandum Order 20, dated July 5 but published only yesterday -- will take effect on July 27.
In his message accompanying Memorandum Order No. 20, President Benigno S. C. Aquino III said the 2011 IPP “seeks to generate more investments in key areas of the economy that are considered as ‘enablers’ and ‘triggers’, thereby creating much-needed jobs...”
Public-private partnership (PPP) projects have been included in the list of preferred investments on top of 12 other areas carried over from last year.
Besides PPP, the Palace order listed the 12 other “preferred activities” as: agriculture, agribusiness and fishery; creative industries and knowledge-based sources; disaster prevention, mitigation and recovery; energy; “green” projects; infrastructure; mass housing; motor vehicles; research and development; strategic projects that promise high socioeconomic returns “that will significantly contribute to the country’s economic development”; shipbuilding; and tourism.
In its initial IPP draft, the BoI had excluded creative industries, which include film and theater, and disaster prevention from the proposed list of preferred activities. But these areas were restored to the list on Mr. Aquino’s instruction.
The Palace order also includes a “mandatory list,” composed of activities required for inclusion in the IPP by existing laws, namely:
• “extensive” plantation of forest land of tree crops -- except fruit trees -- for commercial and industrial purposes;
• exploration and development of mineral resources, mining/quarrying and processing of metallic and non-metallic minerals;
• printing, re-printing, publication and content development of books and textbooks;
• refining, storage, distribution and marketing of petroleum products;
• establishment of waste-recycling facilities;
• establishment of wastewater treatment and sewage facilities, as well as adoption of water pollution control, cleaner production and waste minimization technologies;
• development of renewable energy facilities, equipment and components; and
• manufacture of technical aids and gadgets for use of the disabled, as well as establishment of special schools, homes, residential and retirement communities for this sector.
The Palace order also includes merchandise and service exports, “activities in support of exporters”, as well as 12 areas identified solely for the Autonomous Region in Muslim Mindanao.
Saying that his agency had approved the implementing rules and regulations (IRR) of the 2011 IPP and submitted them to Malacañang “for final approval”, Cristino L. Panlilio, Trade undersecretary for investment promotions and managing head of the Board of Investments (BoI), said in a telephone interview yesterday that “it (IRR) should be published next week.”
Mr. Panlilio noted that “the only controversial issue of the IRR was the housing issue with HUDCC (Housing and Urban Development Coordinating Council)”, referring to the much-debated price ceiling for mass housing projects qualified for income tax holiday.
BoI proposed to reduce the cap to P2.5 million from last year’s P3-million threshold, while Vice-President Jejomar C. Binay, who heads the HUDCC, had insisted on keeping the higher limit.
In a brief chance interview in Makati City yesterday, Mr. Binay said only that, “eventually, there will have to be a meeting of minds.” -- EJD/FJGDF
Source: BusinessWorld Online July 12, 2011
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