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MANILA - The Board of Investments (BOI) has removed micro enterprises from the list of businesses that can qualify for tax and other perks under this year's Investment Priorities Plan (IPP).
A micro enterprise 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 micro enterprises 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 (ARMM).
But the 2013 IPP will no longer accept applications for micro enterprises, as incentives are already available under the Barangay Micro-Business Enterprise (BMBE) Law, according to the BOI.
“In previous years, we included micro enterprises since some LGUs [local government units] were not implementing the BMBE Law. We even provided a special window for micro enterprises 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:
- Projects with carbon emission credits have to qualify under any of the IPP listings but not as export-oriented activities;
- 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;
- 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;
- Energy projects to be given one year from date of registration to submit financial closure;
- For air transport projects, revenues entitled to ITH will be limited to passenger and cargo revenues, and Civil Aeronautics Board (CAB) certification is required;
- For water transport projects, minimum lease period increased to five years;
- For land transport projects, alternative fuel buses were included;
- Ports, railways and toll ways transferred from infrastructure list to PPP list, upon request of the PPP Center for easier monitoring of projects;
- Motorcycle assemblers must allocate half of the $2-million investment requirement to manufacturing equipment; and
- 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 roadmaps that the government and the private sector are jointly developing will be integrated in next year’s IPP. These roadmaps 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 No. 226, the annual IPP should be submitted to Malacañang in March, but Reyes said the BOI aims to have the President approve the 2014 IPP before yearend 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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