BOI sees CREATE IRR completion this month, SIPP in January 2022
The Implementing Rules and Regulations (IRR) of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act is expected to be finalized this month but the new Strategic Investment Priorities Plan (SIPP) has to wait until early next year yet.
“We’re hoping to sign the IRR within this month to provide clarity,” said Board of Investments Executive Director Ma. Corazon Halili at the 1st Philippines-Hungary Online Forum.
As government agencies try to iron out the CREATE IRR, economic zone locators and support providers have raised concerns on the continuity of their incentives as government agencies start to craft the IRR of the CREATE Law.
An insider from one of the investment promotion agencies (IPAs) of the government said these are some gray areas in the CREATE Law that should be made clearer in the IRR.
For instance, ecozone enterprises have pushed for the inclusion of support to export activities and inter-zone sales among the eligible activities with incentives as these entities do not fall squarely under the definition for export and domestic enterprises.
The official said that support to export enterprises such as ecozone developers, utilities, warehouse and environmental management facilities providers are critical to the viability of export locators.
Also being raised is for the IRR to consider the non-extension of tax and duty free importation incentive for ecozone locators upon termination of the CREATE incentives even as the separate customs territory status vested on ecozones is provided in the Philippine Economic Zone Authority (PEZA) and was not repealed by CREATE.
Ecozone enterprises under the income tax holiday regime also seek clarification on the payment of real property tax and local permits and fees.
For the SIPP, Halili explained that it requires a lot of consultations with the private sector. “In light of the pandemic, we hope to finalize the SIPP by January next year, at the latest,” said Halili.
The SIPP is a provision in the CREATE. It contains the list of projects and economic activities that will be entitled to government tax and fiscal incentives under the law.