The Fiscal Incentives Review Board (FIRB) is supporting the proposal on the Strategic Investment Priority Plan (SIPP) by the Board of Investments (BOI), an attached agency of the Department of Trade and Industry (DTI).
The SIPP will serve as the primary basis for determining which projects or activities are eligible for fiscal incentives.
This Cabinet-level interagency board expressed its support for the proposed SIPP during its Feb. 21 meeting.
“The issuance of the SIPP will support the government’s COVID-19 recovery strategy as it will allow investors to qualify for longer tax incentives for more sophisticated activities. This will allow us to attract even better quality investments,” Finance Secretary and FIRB Chairman Carlos Dominguez III said during the FIRB meeting.
The Finance chief also reiterated that once the President signs the SIPP, this will put an end to the policy uncertainties among foreign investors who have been waiting for the SIPP’s release following last year’s enactment of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.
As mandated under the CREATE Act, the priority projects and activities in the SIPP will be categorized into three tiers.
The BOI proposed that Tier 1 include all activities under the 2020 Investment Priorities Plan (IPP), guided by the Revitalizing Businesses, Investments, Livelihoods and Domestic Demand (REBUILD) framework of the DTI.
Tier 2 incentives may be granted to activities supportive of establishing a competitive and resilient economy, which specifically fill gaps in the value chain and are import-competing.
Meanwhile, activities qualified for incentives under Tier 3 are those that support an accelerated transformation of the economy, which specifically promote innovation and are critical to structural transformation.
Moreover, as instructed by Dominguez, the BOI is set to further refine certain definitions in the SIPP before endorsing it to the Office of the President (OP).