The Department of Finance (DOF) said the government will finalize within this month the Strategic Investment Priority Plan (SIPP) of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law.
In a statement, Finance Secretary Carlos G. Dominguez III said on Wednesday, Jan. 12, that the forthcoming release and publication of the SIPP will serve only as the first step in attracting potential investors.
“The Fiscal Incentives Review Board (FIRB) has enjoined the Board of Investments (BOI), an attached agency of the Department of Trade and Industry (DTI), to finalize the SIPP by January 2022,” the DOF said.
The SIPP, once finalized, will determine the priority industries, projects and activities that can be granted fiscal incentives by the government under CREATE, otherwise known as Republic Act No. 11534.
“As I have said before, once the categories are identified, the next step is for each of the investment promotion agencies (IPAs) to identify the specific companies they want to invite, and then discuss with them what it would take for them to invest in the country,” Dominguez said.
Dominguez is the chairman of the FIRB that serves as the oversight body for the country’s 13 existing IPAs. Trade Secretary Ramon Lopez, meanwhile, is the co-chair of the Cabinet-level interagency board.
FIRB aims to ensure that registered business enterprises (RBEs) receiving tax breaks would eventually deliver the investments and jobs they had promised when they sought such fiscal incentives from the government.
Lopez emphasized that the current SIPP is effective but a transitional one, based on the 2020 Investment Priorities Plan (IPP) of the BOI.
Thus, he directed the BOI to finalize the SIPP for presentation to the board this month, considering that a number of industry studies and parameters have already been considered in the drafting.
In June last year, Dominguez and Lopez, respectively, instructed the IPAs to identify at least two leading companies in each industry tier in the SIPP and to determine what incentives should be offered to these potential investors to encourage them to set up shop in the Philippines.
The DOF and DTI signed the implementing rules and regulations (IRR) of the CREATE Act in June 2021, more than two weeks ahead of the July 10, 2021 deadline set under the law.
Micro, small and medium enterprises (MSMEs) will be the biggest beneficiaries of CREATE with the corporate income tax (CIT) rate reduction, the DOF said.