The Fiscal Incentives Review Board (FIRB) recently implemented its Strategic Investment Priorities Plan (SIPP) framework which designates vaccine manufacturing and development as a high-value industry that qualifies for tax incentives by virtue of Republic Act (RA) No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.
With the global vaccine supply constantly in a state of overwhelming demand and moderate supply, some pharmaceutical firms and private groups have begun looking into local vaccine production in order to achieve self-sufficiency in the near future.
Building on these plans, tax incentives would benefit and encourage these entities and others to pursue domestic vaccine development.
Stipulated within the SIPP framework is the creation of tier levels that determine the period length and options available, for the incentives that aim to increase the country’s competitive edge in the international market.
Sectors that are “critical to the structural transformation and industrial revolution of the economy” fall under tier 3 and are entitled to the longest incentive period.
Under the tier 3 classification are those that endeavor research in the fields of technological, medical, industrial, and scientific development.
Vaccines, new drone models, electric vehicles, smart infrastructure, as well as cutting-edge technology such as artificial intelligence, are blanketed under the third tier level.
In addition to this, the Department of Trade and Industry (DTI) was tasked by Finance Secretary Carlos Dominguez III to single out at least two frontrunners in each industry tier level, to decide on the incentives to be given in order to secure local investments from them.
Dominguez’s request to the FIRB for immediate tax incentive approval for all investments amounting to more than P1 billion per venture until the end of 2022, was also adopted.
Furthermore, the online Fiscal Incentives Registration Monitoring System (FIRMS) was also granted approval by the FIRB in order to fast-track the applications of potential investors.