Trade Dept set to keep most of 2012 perks for 2013 investments priorities plan

The Department of Trade and Industry will likely retain most of the incentives in the 2012 Investment Priorities Plan (IPP) for this year's IPP, as major changes will have to wait for next year, the department's top official said Friday. “For the 2013 IPP, we may carry over most of the incentives, but will include the removal of perks for some areas which we have already released resolutions on. Any big changes will have to be in the 2014 IPP,” Trade Secretary Gregory L. Domingo told reporters. The IPP defines which sectors will be favored with incentives such as tax holidays and other tax breaks. Domingo added that he is aware of the position of the Department of Finance, which had called for the removal of income tax holidays for mass housing, shipbuilding, iron and steel and automotive manufacturing, saying that infrastructure and energy projects could recoup the cost of investments through "pricing mechanisms without tax incentives." "We have different functions in the government so we know where they are coming from, but for us we would want to keep as much of the incentives as possible," said Domingo. The 2013 IPP was originally set to be released in May, but now is expected to be sent to the President for approval in June, according to the Board of Investments (BoI). One of the changes reflected in the draft IPP is the definition of "pioneer project." In last year's IPP, some projects with large investments were allowed to be classified pioneer projects and so eligible for four- to eight-year tax holidays. Under the new IPP, projects can only be granted pioneer status if the service or project is completely new to the Philippines. Another proposed change is the requirement of a comment from the Department of Agriculture before an agricultural project is given incentives under the IPP. Under the draft IPP, income tax holidays for tourist establishments in Cebu City, Mactan City, Metro Manila and Boracay will be removed, based on a resolution the BoI promulgated on March 5. Domingo said that discussions for the 2014 IPP will begin after the 2013 list is released. — BM, GMA News