RP Investments Changes proposed.(Main News)

Article excerpt

Byline: MARIO B. CASAYURAN

Senate President Franklin M. Drilon yesterday sought immediate fiscal and administrative changes in the current Omnibus Investments Code of the Philippines passed in the Eighth Congress to make the Philippines more competitive globally and make foreign investments flow to pump up the economy.

Drilon filed Senate Bill 2399 which seeks to harmonize and simplify the government's administration of programs and policies on the grant of fiscal and non-fiscal incentives to promote both foreign and local investments in the country.

Under existing laws and procedures, several government agencies handle the administration, implementation and issuance of investment promotion programs as well as the grant of fiscal and non-fiscal incentives to foreign and domestic investors.

Some of these offices include the Board of investments (BOI), the Philippine Economic Zone Authority (PEZA), the Subic Bay Metropolitan Authority (SBMA), the Clark Development Corp. (CDC), and several other agencies mandated under various laws to establish, maintain and manage special economic free port zones in the Philippines.

"The system of having different agencies administer and implement various incentives laws creates a perception among foreign investors that the Philippines does not have unifled and responsive investments promotion programs and policies," Drilon said.

"Hence, to establish uniform, harmonized, simplified, and consistent investment policies and programs to make the Philippines more competitive globally, it is imperative that only one governing statute regulate the incentives granted by the government," he pointed out.

The incentives under the Drilon bill include:

Income Tax Holiday (ITH):

- Four years for all activities in the Investment Priorities Plan (IPP) and domestic oriented activities located within the National Capital Region (NCR).

- Six years for export or domestic activities that produce or render new or distinct product or service and an additional two years for locators outside NCR.

- Eight years for domestic activities with backward and forward linkages or strong potential for export development and listed in the IPP.

- An additional four years for strategic projects. Strategic projects shall be determined and approved as "strategic" by unanimous decision of an inter-agency committee composed of the Department of Trade and Industry (DTI), National Economic Development Authority (NEDA), and the Department of Finance (DoF).

Net Operating Loss Carry-Over (NOLCO):

- Loss incurred within the first five years from the start of commercial operation may be carried over for the next five years following such loss. …