Question & AnswerQ&A (BATAS PAMBANSA BLG. 391)
The official name of the Act is the Investment Incentive Policy Act of 1983.
The State's policy is to encourage private domestic and foreign investments in various sectors including industry, agriculture, and mining to provide significant employment opportunities, increase productivity and exports, improve technical skills, develop the economy, and accelerate regional development.
Fiscal incentives shall terminate after a period of not more than 10 years from registration or start-up of operations unless a specific period is otherwise stated.
A 'Registered Domestic Producer' is a registered enterprise engaged in the production, manufacturing, or processing of goods or commodities primarily for the domestic market, including production services.
Registered domestic producers may be granted tax and duty exemption on imported machinery, equipment, and spare parts — 50% exemption for non-pioneer and 100% for pioneer producers within five years from registration, subject to conditions and adjustments with tax credits.
The registered domestic producer and the buyer or transferee shall be solidarily liable to pay twice the amount of the tax exemption given.
The Board considers the economic soundness (real economic internal rate of return), contribution to development goals, comparative advantage, measured capacity discounting inefficient capacities, market and technical aspects, and other relevant factors.
No government agency or instrumentality shall import goods tax and duty-free that compete with those produced by registered domestic producers unless in cases where the President determines it is required in the national interest or international commitments require it.
Registered export producers are entitled to tax credit on imported capital equipment, domestic capital equipment, net value earned, net local content of exports, taxes and duties on raw materials, and withholding tax on interest, among others.
Article 77 ensures that all applications filed under the Code shall be confidential and shall not be disclosed except with the applicant's consent or by court order.