MANILA - President Rodrigo R. Duterte has approved the 2022 Strategic Investment Priority Plan (SIPP) which aims to identify industries to which the government hopes to attract investment by offering tax incentives.
The 2022 SIPP, which will be a companion document to the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law, is contained in Memorandum Order No. 61 signed by Duterte on Tuesday but released to reporters on Thursday.
Under the memorandum, activities listed in the 2020 Investment Priorities Plan (IPP) were retained and included under Tier I of the newly formulated SIPP.
Duterte signed the 2020 IPP on Nov. 18, 2020. It took effect on Dec. 6, 2020.
The IPP is the government's blueprint of priority economic activities that qualify for fiscal incentives. It covers the production or manufacture of medicines, medical equipment, and devices, personal protective equipment (PPE), surgical equipment, and supplies, among others.
Tier II was defined as activities "envisioned to promote a competitive and resilient economy and fill in gaps in the Philippines' industrial value chains, and are deemed critical in promoting green ecosystems, ensuring a dependable health system, achieving robust self-reliance in defense systems, and realizing modern, competitive, and resilient industrial and agricultural sectors."
Tier III will include activities that are "projected to accelerate the transformation of the economy primarily through the application of research and development and attracting technology investments. It also includes activities involving the production of equipment, parts, and services that embed new technologies, and the commercialization of research and development output."
The Committee on Ways and Means of the House of Representatives endorsed the newly formulated SIPP on Feb. 7, 2022.
On March 25, the BOI, through Board Resolution No. 08-21 approved the submission of the newly formulated SIPP to the President for approval.
The newly formulated SIPP is aligned with the updated Philippine Development Plan 2017-2022, and with the long-term aspiration and vision of the Inclusive Innovation Industrial Strategy (i3S) of the Department of Trade and Industry and Pagtanaw 2050 of the Department of Science and Technology's National Academy of Science and Technology.
The CREATE Law, which took effect on April 11, 2021, reduced corporate income tax (CIT) from 30 percent to 25 percent for large corporations and to 20 percent for small and medium enterprises that have net taxable income not higher than PHP5 million.
It provides fiscal relief to both domestic and foreign investors doing businesses in the country, a move seen to encourage businessmen to put up domestic operations in a bid to boost economic activities and help in the continued recovery of the economy. (PNA)