Tax holidays for mining removed from IPP

NEW MINING projects will no longer be able to enjoy tax holidays as the Trade department has removed the perk from the proposed 2013 Investment Priorities Plan (IPP) it has endorsed for the President’s approval, the agency said Friday.

Board of Investments (BoI) Executive Director Lucita P. Reyes said in a text message to reporters that "only mining projects have limited incentives to zero duty importation of capital equipment; there are no income tax holidays for [the sector]."

The Finance department said in its March 26 position paper that income tax holidays for some sectors, including mining, should be removed.

The 2013 IPP features much the same priority areas as the 2012 version, with only minor changes in some sectors.

"The proposed 2013 IPP roster includes agriculture/agribusiness and fishery, creative industries/knowledge-based services, shipbuilding, mass housing, iron and steel, energy, infrastructure, research and development, green projects, motor vehicles, strategic projects, hospital/medical services, disaster prevention and mitigation and recovery projects," the Trade department said in a statement Friday.

It also transferred health and medical-related activities from the tourism sector to hospital and medical services "for a more focused classification."

The IPP lays out which sectors the government can grant incentives, like four-year to six-year income tax holidays and duty-free importation. Other perks include relief from corporate taxes and employment of foreigners.

Trade Secretary Gregory L. Domingo said on July 16 that the department has forwarded the proposed IPP for the President’s approval. If approved, the IPP cannot be enforced without implementing guidelines.

The Trade department is also now preparing for the 2014 IPP.

"The agency is currently undertaking studies, in partnership with the private sector, in the development of the country’s industry roadmaps to support the formulation of the 2014 IPP," the statement said.

The draft 2014 IPP is expected to be completed by December this year.

source:  Businessworld