The Fiscal Incentives Review Board (FIRB) has approved the grant of tax incentives for the rail operations of an P81-billion subway project in Makati City that is expected to begin commercial operations in January 2026.
A majority of the five-member FIRB chaired by Finance Secretary Carlos Dominguez III approved last month the grant of 4 years of income tax holiday, followed by 5 years of enhanced deductions and duty exemption on importation for the construction, operation, management, and maintenance of the rail project.
Dominguez made it clear that this package of incentives is confined only to the activity applied for, which is the rail operation. The incentives approved will not apply to the other business activities that would be generated from the subway operations, such as the lease of retail areas and advertising, which should be subject to the regular corporate income tax rate and other applicable taxes.
In deciding to approve the project, the FIRB took into consideration the projected increase in economic productivity of P24.4 billion per year once the subway system becomes operational in 2026. This will be monitored, along with the other projected benefits, in accordance with the principle of granting incentives based on merit or performance embodied in the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.
Trade Secretary and FIRB co-chair Ramon Lopez said this productivity boost and other benefits offset the economic costs that will be incurred by the government, such as foregone revenues.
Throughout the deliberations for the project, Dominguez also said that the Makati City government and the Department of Transportation (DOTr) should work out the details of how to connect the proposed subway to the Metro Manila Subway project of the national government.
More on TaxReform News
Clean Air Asia backs DOF tax reforms →Date Posted: March 21, 2017
An international nongovernment organization advocating clean air initiatives is backing the Department of Finance (DOF)-proposed … Continue reading Clean Air Asia backs DOF tax reforms
YEARENDER: DOF crafts “game-changing” tax reform package in 2016 →Date Posted: January 4, 2017
The Department of Finance (DOF) completed in less than 90 days into the Duterte administration … Continue reading YEARENDER: DOF crafts “game-changing” tax reform package in 2016
Dominguez urges Senate to include stimulus measures in calibrated corporate tax reform bill →Date Posted: May 21, 2020
Finance Secretary Carlos Dominguez III has called on the Senate to include the economic team’s … Continue reading Dominguez urges Senate to include stimulus measures in calibrated corporate tax reform bill
DOF to urge Congress to pass higher tobacco tax rates to further discourage smoking, raise more healthcare fundsDate Posted: April 29, 2019
The Department of Finance (DOF) will “try its best” until the last minute to convince the Congress to impose new “sin” tax rates on tobacco products that will make cigarettes pricey enough to further discourage smoking, especially among teenagers.