THE Fiscal Incentives Review Board (FIRB) on Tuesday approved the tax incentives application of TDK Philippines Corp. for a P2.5-billion manufacturing project, the Department of Finance (DoF) said.
TDK proposes to make microwave-assisted magnetic recording sliders, industrial equipment used in hard drive manufacturing.
The approval of the application for fiscal incentives “is a boost to our semiconductor and electronics industry, which largely contributes to the Philippine economy,” Finance Assistant Secretary and FIRB Secretariat Head Juvy C. Danofrata said in a statement.
Ms. Danofrata said that the project is classified as an export activity and falls within the activities qualified for incentives under the Strategic Investment Priority Plan.
The TDK project is also the first Philippine Economic Zone Authority-endorsed application approved by the FIRB.
According to the DoF, the project was granted an income tax holiday, special corporate income tax, duty exemption on the import of capital equipment, raw materials, spare parts, and accessories, as well as a value-added tax (VAT) exemption on imports, and VAT zero-rating on local purchases.
Finance Secretary Benjamin E. Diokno said that the performance commitments of registered business enterprises will be monitored by the investment promotion agency and the FIRB.
“We want to make sure that all these fiscal incentives we grant to registered business enterprises indeed will result in substantial benefits to our economy,” he added.
Finance Undersecretary and FIRB Technical Committee chairperson Cielo D. Magno said this month that the FIRB is evaluating the application process for tax incentives.
She said that the agency is working on making companies ramp up mitigation measures for their compliance violations instead of penalizing them later on.
The FIRB must clear investment incentives on projects larger than P1 billion. — Luisa Maria Jacinta C. Jocson