The additional tax and fiscal incentives being offered by the Board of Investments (BoI) to entice companies affected by the global financial crisis to undertake activities to keep their workers, maintain their workforce and hire more even with the economic difficulties failed to attract a single taker.
Job saving was the main thrust under the Contingency List of the 2009 Investment Priorities Plan (IPP) as the global financial crisis turn for the worst last year affecting mostly the manufacturing sector, particularly the electronics industry and other export-oriented sectors.
“Nobody has availed of the Contingency List,” declared Trade and Industry Undersecretary and Board of Investments managing head Elmer C. Hernandez as the prepares for the crafting of 2010 IPP.
But, Hernandez said, there have been inquiries as to deadline in the availment of the Contingency List. Hernandez did not elaborate as to why the Contingency List has failed to entice them to register their job saving measures last year to get additional tax incentives.
Incentives for IPP-listed companies, however, remain in effect until a new one is approved by Malacanang unless the economic activity is carried over in the new IPP. Historically, a new IPP becomes effective sometime in May of each year. The 2009 IPP has provided that the Contingency List would be removed from the IPP only upon an official determination by the National Economic and Development Authority that the global financial crisis is over.
“So, it is up to the NEDA to recommend the continued inclusion of the Contingency List in the 2010 IPP or not,” Hernandez said.
The IPP is an annual list of priority projects that are eligible for government tax and fiscal incentives. The 2009 IPP was crafted in such a way that it would help address job losses and factory closures amid the global financial crisis that occurred last year.
Following the crisis,inter-government agencies led by the BoI crafted a two-part IPP composed of the Regular List and the Contingency List.
For the Contingency List, the following activities are qualified for government incentives including additional tax deduction on labor expenses and income tax holiday incentives: Retain investments and maintain current number of workers; retain investments and increase current number of workers; increase investments and maintain current number of workers; or increase investments increase current number of workers.
The job saving/creation projects, which is focused on the manufacturing sector, existing projects and/or activities affected by the economic crisis that will either retain investments and maintain current number of workers and those that will retain investments and increase their number of employees are entitled to additional deduction on labor expenses. –BERNIE CAHILES-MAGKILAT, Manila Bulletin
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