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• Trade and Fiscal Incentives |
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1999 Priority Investment Areas on Agriculture & Fisheries
Specific Guidelines to the National & Regional Lists
Fiscal Incentives (BOI) |
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1999 Priority Investment Areas on Agriculture & Fisheries |
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GENERAL NOTE: Unless specified, the activities listed herein may be registered on
pioneer or non-pioneer status Mandatory Inclusions This shall
include all the areas/activities as provided for under existing laws, and/or their implementing rules and regulations, and international agreements which specifically mandate inclusions in the IPP, such as:
A. Agriculture and Fishery (R.A. 8435) covers the following:
1. Commercial Production and/or Processing/Breeding/Propagation of planting materials/breeding materials for the following: a. Agricultural crops (such as, but not limited to, food crops,
feed crops, fiber crops, and other commercial crops, including traditional crops) b. Poultry and Livestock (such as, but not limited to, cattle, swine, goats and sheep), including feed milling c. Fishing and Awuaculture (such as, but not limited to. Lapu-lapu, tilapia, eel, hito, bangus, shrimps/prawn culture, seaweeds) 2. Agricultural/Fishery Services
a. Post harvest activities including but not limited to the following:
- Mechanized bulk handling, transport and storage; Warehousing, drying and milling of grains
- Setting up of ice plant and cold storage facilities. Ice plant projects as a separate activity may be registered if they locate in LDAs to service agricultural and fishery products
b. Other farm service activities
- Farm machinery and equipment services
- Pests and diseases control services
- Irrigation and drainage services
- Intermediation services
3. The following activities, as provided for in their respective laws, are also covered under this heading: a. Production and/or processing of high-value crops as defined in R.A. 7900
(High-Value Crops Devt. Act of 1995) b. Commercial fishing operation as defined in R.A. 8550 (Phil. Fisheries Code of 1998)
B. Industrial Tree Plantation (Sec. 36 (f) of P.D. 705)
Covers the establishment of forest tree plantations which include timber and non-timber species such as rubber, bamboo, rattan, etc. (excluding fruit trees) for commercial and industrial purposes.
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Specific Guidelines to the National & Regional Lists |
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Activity Guidelines 1. Agriculture and Fishery
1. Processing of agricultural and fishery products a) Agricultural processing
activities refer to the processing of raw agricultural and fishery products into semi-processed or finished products which include materials for the manufacture of food and/or non-food products. b)
Processing of raw/fresh products into semi-processed or finished product may qualify for registration provided the said raw/fresh products are locally sourced through any of the following schemes: (1) integration
with primary production; or (2) contract growing scheme; or (3) supply contract with the primary producers (farmers or farmers'cooperatives). The contract should be submitted together with the application for
registration, otherwise, it would be required as a pre-registration condition. This requirement, however, is not imposed on the following activities: processing of fish and other aquatic products; sugar milling;
coco oil milling; rice and corn milling; feed milling; and meat processing. c) Processing activities involving the use of semi-processed products as the major raw materials may be registered provided
the said semi-processed products are locally produced. Supply contract with agro-processors (e.g. sugar miller, coco oil miller), is also required. d) For activities involving the manufacture of
mixtures and/or blends (such as cocoa, coffee, tea and tobacco), local raw materials should account for more than 50% of the total volume of major raw materials. e) Processing activities using
agricultural and fishery by-products and waste materials (e.g. coconut charcoal, coco husks, sugar cane bagasse, rice hull, etc.), if not integrated with the main production and processing activity, are nor
registrable under this heading. f) Processing of agricultural and fishery by-products and wastes into products which are used in agriculture and fishery (e.g. fish meal, organic fertilizer, feeds,
etc.), are qualified for registration. Processing of agricultural and fishery by-products and wastes into products which are not for use in agriculture and fishery may qualify for registration, provided it is
integrated with the agricultural/fishery production activity. 2. Agricultural/Fishery Services a) All post harvest and other farm services activities must be primarily intended for agricultural
and fishery producers. b) In case the proponent is also an agricultural/fishery producer, it may be allowed to use for itself up to 30% of the total annual service capacity
2. Industrial Tree Plantation
a) New project refers to the development of any public or private land to plantation of timber and non-timber producing species to supply the raw material
requirements of forest-based industries. It also includes plantation with existing tree crops which have not yet reached commercial harvest.
b) Tree plantation in public lands shall be covered by any of the following:
1. Socialized Industrial Forest Management
Agreement (SIFMA); 2. Industrial Forest Management Agreement (IFMA);
3. Private Forest Development Agreement (PFDA);
and, 4. Community-Based Forest Management Agreement
(CBFMA).
c) Establishment of industrial tree plantations must conform with the rules and regulations of the DENR, or DAR, if applicable. d) Expansion projects may be registered if at least 85% of
existing land area has been planted to tree crops, or if the proposed project shall be located within the 50-km distance from the nearest boundary of the existing ITP project of the proponent.
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Fiscal Incentives (BOI) |
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A. Tax Exemptions
B. Tax Credits
C. Additional Deductions from Taxable Income
D. Non-Fiscal Incentives |
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Incentive privileges may be enjoyed upon registration. In general, registered enterprises entitled to the following incentives: A. Tax Exemptions
1. Income Tax Holiday (ITH) a) BOI registered enterprises shall be exempt
from the payment of income taxes reckoned from the scheduled start of commercial operations as follows:
1) New projects with a pioneer status for six (6) years; 2) New projects with a non-pioneer status for four (4) years 3) Expansion projects for three (3) years. As a
general rule, exemption is limited to sales revenue/volume; 4) New or expansion projects in less developed areas for six (6) years, regardless of status, and; 5) Modernization projects
for three (3) years. As a general rule, exemption is limited to incremental sales revenue/volume.
b) The income tax holiday is limited in the following cases:
1) Export traders may be entitled to the ITH only on their income derived from the following:
a) Export of new products, i.e., those which have not been exported in excess of US $100,000 in any of the two (2) years preceding the filing of application for registration, or b)
Export to new markets, i.e., to a country where there has been no recorded import of a specific export product in any of the two (2) years preceding the filing of the application for registration.
c) New registered pioneer and non-pioneer enterprises and those located in the LDAs may avail themselves of a bonus year in each of the following cases:
2) The indigenous raw materials used in the manufacture of the registered product must at least be fifty percent (50%) of the total cost of raw materials for the preceding years prior to the
extension unless the Board prescribes a higher percentage; or 3) The ratio of total imported and domestic capital equipment to the number of workers for the project does not exceed US $10,000 to one
(1) worker; or 4) The net foreign exchange savings or earnings amount to at least US $500,000 annually during the first three (3) years of operation. In no case shall the registered pioneer firm
avail of this incentive for a period exceedingly eight (8) years.
2. Exemption from taxes and duties on imported spare parts
A registered enterprise with a bonded manufacturing warehouse shall be exempt from customs duties and national internal revenue taxes on its importation of required supplies/spare parts for
consigned equipment or those imported with incentives.
3. Exemption from wharfage dues and export tax, duty, impost and fees
All enterprise registered under the 1999 IPP will be given a ten (10) year period from date of registration to avail of the exemption from wharfage dues and any export tax, impost and fees on its
non-traditional exports products.
4. Tax exemption on breeding stocks and genetic materials
Agricultural producers will be exempted from the payment of all taxes and duties on their importation of breeding stocks and genetic materials within ten (10) years from the date of registration of commercial
production.
B. Tax Credits
C. Additional Deductions from Taxable Income
D. Non-Fiscal Incentives
1. Employment of foreign nationals
A registered enterprise may be allowed to employ foreign nationals in supervisory, technical or advisory positions for five (5) years from date of registration. The position of president,
general manager and treasurer of foreign-owned registered enterprises or their equivalent shall however not be subject to the foregoing limitations.
2. Simplification of customs procedures for the importation of equipment, spare parts, raw materials and supplies and exports of processed products. 3. Importation of consigned
equipment for a period of ten (10) years from date of registration, subject to posting of a re-export bond. 4. The privilege to operate a bonded manufacturing/trading warehouse subject to Customs rules
and regulations
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