Information and communications technology (ICT) advocates in Western Visayas see the whole region as an abundant source of more ICT-enabled startups and innovative enterprises under the new regime of government fiscal incentives.
The Board of Investments (BOI) in the Visayas meet with various information and communications technology (ICT) advocates in the Visayas to aggressively promote the incentivesunder the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) or Republic Act No. 11534, a law which cuts corporate income taxes and provides incentives to help businesses recover from the pandemic and encourage foreign investments.
CREATE was signed by President Rodrigo Duterte on March 26, 2021 and it took effect on April 11, 2021. Its Implementing Rules and Regulation (IRR) took effect on June 26, 2021. The Board of Investments (BOI), in coordination with the Fiscal Incentives Review Board (FIRB), investment promotion agencies (IPAs), other government agencies administering tax incentives, and the private sector, shall formulate and recommend the SIPP for the approval of the President.
Floreza Alpuerto, Chief Investments Specialist for Board of Investments in the Visayas, conducted a series of briefings to meet the different ICT councils and ICT advocates in the Visayas last April to encourage enterprises to register under the enterprise database of BOI, and to apply for fiscal incentives under the CREATE law for qualified new, expansion and modernization projects.
CREATE reduced corporate income tax rates from 30 percent to 20 percent for micro, small and medium enterprises, and to 25 percent for other corporate taxpayers. It also rationalizes fiscal incentives granted to investors and provides for a new system for the administration of incentives. (Source: Inquirer – Duterte signs CREATE bill into law)
On April 12, BOI Visayas Chief Alpuerto gave a briefing to the ICT ecosystem in Bacolod and Negros Occidental led by the Bacolod-Negros Occidental Federation for ICT (BNEFIT). The goal of BNEFIT for Bacolod and Negros Occidental is to increase the digital enterprises to create ICT-driven jobs. So we need to promote activities to help how tech and ICT enterprises can avail of existing tax incentives to start, grow, and expand in the different communities to create more jobs and investments.
The BOI is mandated to grant incentives to BOI-registered enterprises engaged in preferred areas of investment as providedunder Article 39 of E.O. No. 226, otherwise known as the Omnibus Investments Code of 1987, as amended by R.A. No. 7918 and now under RA 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which provides:
- Income Tax Holiday
- Additional Deduction on Labor Expense
- Duty-free or Duty-reduced Importation of Capital Equipment
- Unrestricted Use of Consigned Equipment
- Tax & Duty-free Importation of Spare Parts and Supplies
- Employment of Foreign Nationals
- Special Investor’s Resident Visa
The CREATE law spells out different tax incentives and enhanced deduction, as follows:
Under CREATE, it is ideal for existing regestered business enterprises with BPO, PEZA and other investment promotion agencies (IPAs) to consider relocating their business from the National Capital Region to metropolitan areas, or areas adjacent to NCR, or to other areas within the Philippines, to avail of an ITH extension from completion of relocation.
Currently, the IPP of 2020 is still being observed until a new SIPP is approved.
To know more about the CREATE Law and the processes of BOI, here are the links to check:
► Investor’s Guidebook 2021 https://bit.ly/3kki7ky
► Registering with the BOI https://bit.ly/3hLWqs5
► Primer for BOI registered companies https://bit.ly/3nHGn2i
► 2020 IPP Guidelines https://bit.ly/3Cqb6oz