The Fiscal Incentives and Review Board (FIRB) has rolled out a new online system that can be used by business enterprises applying for tax incentives under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
Allan Leo Paran of the FIRB Secretariat said in a recent webinar that the agency has activated its Fiscal Incentives Registration and Monitoring System (FIRMS). The system is an online registration and incentives application portal that investors or enterprises can use to submit and monitor their applications for tax incentives with any of the investment promotion agencies (IPAs). Paran explained that before CREATE was passed, the different IPAs applied their own set of requirements, processes, and evaluation procedures in granting tax incentives, and this often led to differences in the criteria and basis for awarding the grant.
FIRMS aims to unify those processes and make all transactions electronic, allowing applicants to conveniently submit their application and required documents online, he added.
FIRMS will also serve as a system for the IPAs, FIRB and other government agencies to review and approve or reject proposed activities and projects. The goal of CREATE is to monitor the grant of tax incentives to investors and enterprises and assess whether these perks redound to the benefit of the economy, and the way to do this is through this online database, said Paran.
He said the online monitoring is being conducted because one of the key objectives of CREATE is to grant tax incentives that are performance-based, targeted, time-bound and transparent.
Essentially this means that under the CREATE, there will be no incentives that will last forever, Paran said.
CREATE, or Republic Act No. 11534, reduces corporate income tax rates and provides other tax relief measures to help businesses recover from the pandemic as well as provides measures that rationalize the grant of fiscal incentives.
Under CREATE, the Board of Investments, in coordination with relevant agencies and the private sector, is mandated to formulate the Strategic Investment Priority Plan (SIPP).
Michael Ricaza, also of the FIRB Secretariat, at the same webinar underscored the importance of the SIPP. To be entitled to tax incentives, an activity or project has to be included in the plan first.
Further, incentives will not be automatically granted to enterprises. Instead, their sector or industry will have to undergo an evaluation process to see if it should be included in the SIPP.
“Right now the 2020 Investment Priorities Plan is the transitional SIPP because the newly formulated SIPP is still, I believe, in the process of being forwarded to the President” for signing, said Ricaza.
The SIPP is a list of priority areas that will be entitled to tax incentives, with the aim to attract high-value, labor-intensive investments that will create more jobs and further sharpen the Philippines’ competitiveness in the global market.
According to the FIRB website, those who should create a FIRMS account are businesses looking to register a new activity/project and apply for tax incentives and those with at least one activity/project currently registered with an IPA. Each business enterprise may only register one FIRMS account.
FIRMS may be accessed through the FIRB website (firb.gov.ph) or directly at firms.firb.gov.ph/login.