The newly reconstituted Fiscal Incentives Review Board (FIRB) aims to complete the implementing rules and regulations (IRR) of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) Act by the third week of May, or around two months ahead of the 90-day deadline set under the law.
The CREATE IRR will contain details on the new menu of tax perks awaiting investors, as well as the expanded functions of the FIRB as overseer of the grant of investment incentives.
Chaired by Finance Secretary Carlos Dominguez III, the Board of the FIRB had its first meeting on Wednesday (April 14), or 3 days after the effectivity of the CREATE Act on April 11, to discuss the Board’s broader functions under this law and the proposed set of industries qualified to get generous tax breaks in the upcoming Strategic Investment Priority Plan (SIPP).
During the virtual meeting, the FIRB, which is co-chaired by Department of Trade and Industry (DTI) Secretary Ramon Lopez, agreed to set May 17 as the target date for signing the IRR on Title XIII of CREATE, which covers the expanded functions of the Board and the fresh menu of tax incentives available to investors and enterprises under this law.
Under CREATE, the Secretaries of the Department of Finance (DOF) and DTI are given 90 days from the effectivity of the law, or by July 11, to promulgate the IRR of Title XIII.
“If you can finish it in less than 30 days, the better. Let everybody focus on this date (May 17),” Dominguez told members of the FIRB present during the meeting.
DOF Assistant Secretary Juvy Danofrata, who was designated to head the FIRB Secretariat, said the Board is targeting to submit the IRR of Title XIII for final review by Secretaries Dominguez and Lopez by May 10.
The DOF had two initial discussions with the BIR and the BOI-DTI this week on the draft IRR and are scheduled to have a final meeting next week. A joint DOF-DTI consultation with the various investment promotion agencies (IPAs) will be held on the week of April 26 to discuss the draft, as well.
The various IPAs include the Board of Investments (BOI), Regional Board of Investments – Autonomous Region in Muslim Mindanao (RBOI-ARMM), Philippine Economic Zone Authority (PEZA), Bases Conversion and Development Authority (BCDA), Subic Bay Metropolitan Authority (SBMA), Clark Development Corporation (CDC), John Hay Management Corporation (JHMC), Poro Point Management Corporation (PPMC), Cagayan Economic Zone Authority (CEZA), Zamboanga City Special Economic Zone Authority (ZCSEZA), Phividec Industrial Authority (PIA), Aurora Pacific Economic Zone and Freeport Authority (APECO), Authority of the Freeport Area of Bataan (AFAB), and Tourism Infrastructure and Enterprise Zone Authority (TIEZA)
While the new SIPP under CREATE has yet to be completed, the FIRB agreed that the current 2020 Investments Priorities Plan (IPP) will be adopted as the transitional list of priority sectors to be promoted for investments and qualified for tax incentives, Dominguez said.
The 2020 IPP approved by President Duterte under Memorandum Order (MO) No. 50 dated December 15, 2020 lists, among others, the following preferred areas and activities: all qualified activities relating to the fight against the COVID-19 pandemic; investment activities, subject to the determination by the Board of Investments (BOI), supportive of programs to generate employment opportunities outside of congested urban areas; all qualified manufacturing activities including agro-processing; agriculture, fishery, and forestry; and strategic services, including integrated circuit design, creative industries, and maintenance, repair and overhaul of aircraft.
This IPP also includes healthcare and disaster risk reduction management services; mass housing; infrastructure and logistics; innovation drivers; inclusive business models; environment or climate change-related projects; energy; export activities; those covered by special laws and the list from the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).
The grant of tax incentives to registered projects or activities with investment capital of over P1 billion is now the responsibility of the FIRB under CREATE, while applications for tax incentives for project or activities with investment capital of P1 billion and below will be approved by the IPAs.