NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES )
Third Regular Session 
)
SENATE 
S. NO. 27f)2
I . 
••i'l'".'
liftin’ of i,I *.
24 JUL31 P3 54
Hlica-.! lm:
(In substitution of Senate Bill Nos. 2654 and 2684, taking into consideration House Bill No. 
9794 and Senate Resolution Nos. 219, 244, and 567)
Prepared by the Committee on Ways and Means with 
Senators Gatchalian and Zubiri as authors
AN ACT
AMENDING SECTIONS 27, 28,32, 34, 57,106,108,109,112, 292, 293, 294, 
295, 296, 297, 300, 301, 308, 308-A, 308-B, 309, 310, AND 311, AND 
ADDING A NEW SECTION 295-A, 296-A AND A NEW CHAPTER VI UNDER 
TITLE XIII IN THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS 
AMENDED, AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled:
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SECTION 1. Section 27 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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"SEC. 27. Rates of Income [t] Tax on Domestic Corporations. -
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"(A) In General. - Except as otherwise provided in this Code, an
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income tax rate of twenty-five percent (25%) effective July 1, 2020, is
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hereby imposed upon the taxable income derived during each taxable
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year from all sources within and without the Philippines by every
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corporation, as defined in Section 22(B) of this Code and taxable under
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this Title as a corporation, organized in, or existing under the laws of the
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Philippines[7]: "Provided, That corporations with net taxable income not
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exceeding Five million pesos (P5,000,000.00) and with total assets not
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exceeding One hundred million pesos (P100,000,000.00), excluding land


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on which the particular business entity's office, plant, and 
equipment are situated during the taxable year for which the tax is 
imposed, shall be taxed at twenty percent (20%)[7]: PROVIDED, 
FURTHER, THAT FOR REGISTERED BUSINESS ENTERPRISES 
UNDER THE ENHANCED DEDUCTIONS REGIME AS PROVIDED IN 
SECTION 294(C) OF THIS CODE, A TAX RATE EQUIVALENT TO 
TWENTY PERCENT (20%) IS HEREBY IMPOSED UPON THEIR 
TAXABLE INCOME DERIVED FROM REGISTERED PROJECTS OR 
ACTIVITIES DURING EACH TAXABLE YEAR.
"xxx."
"xxx."
"(B) Proprietary Educational Institutions and Hospitals, - xxx 
"(C) Government-owned or -Controlled Corporations, Agencies or 
Instrumentalities. - xxx
"(D) Rates of Tax on Certain Passive Incomes. - xxx 
"(E) Minimum Corporate Income Taxon Domestic Corporations. - 
xxx
"(F) Offshore Gaming Licensees. - xxx
"(G) Accredited Service Providers to Offshore Gaming Licensees. -
xxx
xxx.
SEC. 2. Section 28 of the National Internal Revenue Code of 1997, as amended, 
is hereby further amended to read as follows:
"SEC. 28. Rates of Income Tax on Foreign Corporations. - 
"(A) Taxon Resident Foreign Corporations. - 
"(1) In General. - Except as otherwise provided in this Code, a 
corporation organized, authorized, or existing under the laws of any 
foreign country, engaged in trade or business within the Philippines, shall 
be subject to an income tax equivalent to twenty-five percent (25%) of 
the taxable income derived in the preceding taxable year from all sources 
within the Philippines effective July 1, 2020[t]: PROVIDED, THAT FOR 
REGISTERED BUSINESS ENTERPRISES UNDER THE ENHANCED


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DEDUCTIONS REGIME AS PROVIDED IN SECTION 294(C) OF
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THIS CODE, A TAX RATE EQUIVALENT TO TWENTY PERCENT
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(20%) IS HEREBY IMPOSED UPON THEIR TAXABLE INCOME
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DERIVED FROM REGISTERED PROJECTS OR ACTIVITIES
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DURING EACH TAXABLE YEAR.
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"XXX."
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"XXX."
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"XXX."
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"(B) Tax on Nonresident Foreign Corporation. -
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"(1) //7 Generai. - xxx"
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SEC. 3. Section 32 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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"SEC 32. Gross Income. -
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(A) Generai Definition. - xxx
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(B) Exclusion from Gross Income. - The following items shall
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.............................
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under this Title:
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(1)
xxx;
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(2)
xxx;
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(3)
xxx;
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(4)
xxx;


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(5) Income Exempt under Treaty. - Income of any kind, to the
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extent required by any treaty obligation, INCLUDING AGREEMENTS
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ENTERED INTO BY THE PRESIDENT WITH ECONOMIES AND
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ADMINISTRATIVE REGIONS SUBJECT TO THE CONCURRENCE OF
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THE SENATE, binding upon the Government of the Philippines."
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(6) 
xxx; and
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(7) 
xxx."
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SEC. 4. Section 34 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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"SEC. 34. Deductions from Gross Income. -
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(A) Expenses. — xxx
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(B) Interest. — xxx
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(C) Taxes. — xxx
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(1) In General. —
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(2) Limitations on Deductions. —
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(3) Credit Against Tax for Taxes of Foreign Countries. —
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(4) Limitations on Credit. —
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(5) Adjustments on Payment of Incurred Taxes. —
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(6) Year in Which Credit Taken. —
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(7) Proof of Credits. —
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{fi) INPUT VAT ATTRIBUTABLE TO VAT-EXEMPT SALES.
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- INPUT VAT DUE ON LOCAL PURCHASES
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ATTRIBUTABLE TO VAT-EXEMPT SALES SHALL BE
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PAID AND DEDUCTIBLE FROM THE TAXABLE
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INCOME OF THE TAXPAYER. UNDER SECTION 109
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OF THIS CODE.
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XXXX."
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SEC. 5. Section 57 of the National Internal Revenue Code of 1997, as amended,
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is hereby further amended to read as follows:
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"SEC. 57. Withholding of Tax at Source. -
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"(A) Withholding of Final Tax on Certain Incomes. - xxx


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"(B) Withholding of Creditable Tax at Source. - The Secretary of
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Finance may, upon the recommendation of the Commissioner, require the
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withholding of a tax on the items of income payable to natural or juridical
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persons, residing in the Philippines, by payor-corporation/persons as
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provided for by law, at the rate of [not less than one percent (1%) but]
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not more than [thirty-two percent (32%)] FIFTEEN PERCENT (15%)
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thereof, which shall be credited against the income tax liability of the
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taxpayer for the taxable year[: Providcd,!^^^., beginning January 1, 2019,
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the-rate-ef--withholding-shall not be loss than one percent (1%) but-net
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more than Fifteen percent (15%) of the income payment],
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"(C) Tax-free Covenant Bonds. - xxx
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"xxx."
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SEC. 6. Section 106 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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"SEC 106. Value-Added Tax on Sale of Goods or Properties. -
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"(A) Rate and Base of Tax. - xxx.
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"(1) The term 'goods or propertied xxx;
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"(2) The following sales by VAT-registered persons shall be
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subject to zero percent (0%) rate:
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(a) Export Sales. - The term 'export sales' means:
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(1) xxx;
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[(2)—Sate—aad—delivery—ef—goods—tef
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(t)—Registered—enterprises—within—a
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separate customs territory os provided
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under------- special------- laws;------- and
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(ii) Registered enterprises within tourism
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enterprises zones as declared by the
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Tourism ■ Infrastructure and Enterprise
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Zone Authority (TIEZA) subject to the
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provisions under Republic Act No. 9593
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or The Tourism Act of 2009;]


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[(3)](2) Sale of raw materials or 
packaging materials to a non-resident buyer for 
delivery to a resident iocal export-oriented enterprise 
to be used in manufacturing, processing, packing or 
repacking in the Philippines of the said buyer's goods 
and paid for in acceptable foreign currency and 
accounted for in accordance with the rules and 
regulations of the BANGKO SENTRAL NG 
PILIPINAS (BSP);
[(4)](3) Sale [of raw materials or packaging 
matcriaiG] OF GOODS to export-oriented enterprise 
whose export sales [exceed] IS AT LEAST seventy 
percent (70%) of total annual production OF THE
PRECEDING TAXABLE YEAR[t]: PROVIDED, 
THAT SUCH GOODS ARE DIRECTLY 
ATTRIBUTABLE TO THE BUSINESS OF THE 
EXPORT-ORIENTED ENTERPRISE: PROVIDED, 
FURTHER, THAT THE EXPORT MARKETING 
BUREAU OF THE DEPARTMENT OF TRADE AND 
INDUSTRY (DTI) SHALL DETERMINE THE 
COMPLIANCE TO THE FOREGOING 
THRESHOLD. ANY EXPORT-ORIENTED 
ENTERPRISE THAT FAILS TO MEET THE 
FOREGOING THRESHOLD SHALL BE 
DISQUALIFIED FROM AVAILING OF VAT ZERO­
RATING IN THE IMMEDIATELY SUCCEEDING 
YEAR;
[(5)—Those considered export sales under 
Executive Order No. 226, otherwise known as the
OmnibtfS-InvoGtmont Code of 1987, and other special
laws; and]


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[(^](4) The sale of goods, supplies, 
equipment and fuel to persons engaged in 
international shipping or international air transport 
operations; Provided, That the goods, supplies, 
equipment and fuel shall be used for international 
shipping or air transport operations^];
(5) SALES TO BONDED WAREHOUSES OF 
EXPORT-ORIENTED ENTERPRISES.
That-subparagraphs (3), (^l), and 
(5) hereof shall be subject to the twelve percent
(12%) value-added tax and no longer be considered
export sales subject to zero percent (0%) VAT rate
upon satisfaction of the following conditionsr
(4)—The—successful—establishmertt---- and
implementation of an enhanced VAT-refund system
that grants refunds of creditable input tax within
ninety (00) days from the filing of the VAT refund
application with the Bureau: Provided, That, to
determine the effectivity of item no. 1, all applications
filed from January 1, 2018 shall bo processed and
must bo decided within ninety (00) days from the
filing of the VAT refund application; and
(2) All pending VAT refund claims as—of 
December 31, 2017 shall be fully paid in cosh-by
December 31, I Provided, FURTHER, That the 
Department of Finance (DOF) shall establish a VAT 
refund center [in the Bureau of-Internal Revenue 
(BIR) and in the Bureau of Customs (BOC)] WITHIN 
ITS REVENUE OPERATIONS GROUP (ROG) that 
will handle the ELECTRONIC processing and 
granting of cash refunds of creditable input tax.


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"An amount equivalent to five percent (5%) of the total VAT
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collection of the BIR and the BOC from the immediately preceding
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year shall be automatically appropriated annually and shall be
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treated as a special account in the General Fund or as trust receipts
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for the purpose of funding claims for VAT refund: Provided, That
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any unused fund, at the end of the year shall revert to the General
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FundH: Provided, further, That the [BIR and the-BGG] DOF shall
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be required to submit to the Congressional Oversight Committee on
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the Comprehensive Tax Reform Program (COCCTRP) a quarterly
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report of all pending claims for refund and any unused funds.
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(b) XXX
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(C) XXX
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(D) THOSE SALES SUBJECT TO ZERO PERCENT (0%) VAT
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UNDER SPECIAL LAWS."
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SEC. 7. Section 108 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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"SEC 108. Vaiue-added Tax on Saie of Services and Use or Lease
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of Properties. -
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"(A) Rate and Base of Tax. - xxx
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"(B) Transactions Subject to Zero Percent (0%) Rate. - The
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following services performed in the Philippines by VAT-registered
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persons shall be subject to zero percent (0%) rate:
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(1) xxx;
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(2) xxx;
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(3) xxx;
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(4) xxx;
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(5) Services performed [by subcontroctors and/or
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contractors in procGGSing, converting, or monufocturing
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goods] for an EXPORT-ORIENTED enterprise whose
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export sales [exceed] IS AT LEAST seventy percent (70%)
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of total annual production OF THE PRECEDING TAXABLE
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YEAR [7]: PROVIDED, THAT SUCH GOODS ARE


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DIRECTLY ATTRIBUTABLE TO THE BUSINESS OF THE 
EXPORT-ORIENTED ENTERPRISE: 
PROVIDED,
FURTHER, THAT THE EXPORT MARKETING BUREAU 
OF THE DEPARTMENT OF TRADE AND INDUSTRY 
(DTI) SHALL DETERMINE THE COMPLIANCE TO THE 
FOREGOING THRESHOLD. ANY EXPORT-ORIENTED 
ENTERPRISE THAT FAILS TO MEET THE FOREGOING 
THRESHOLD SHALL BE DISQUALIFIED FROM 
AVAILING OF ZERO PERCENT (0%) VAT IN THE 
IMMEDIATELY SUCCEEDING YEAR;
(6) X X x;
(7) X X x;
[(8) ScrviccG rendered to:
(i) Registered enterprises within a separate customs 
territory as provided under special laws;-aft^
(ii) Registered enterprises within touriGm enterprise 
zones as declared by the TIEZA subject to the provisions
under Republic Act No. 0593 or The Tourism Act of 2009.] 
[Provided, Viv3it subparogrophs (B)(1) and (B)(5) hereof shati -be 
subjeet-to the twelve percent (12%) value added tax and no longer be
subject to zero percent (0%) VAT rate upon satisfaction of the following
conditions:
(1) The successful establishment and implementation of 
an enhonced-VAT refund system that gronts refunds of creditoblo
input tax witbin ninety (QO) days from the filing of the VAT refund
application -with the Bureau: Provided, That, to determine the
effectivity of item no. 1, all applications filed from January 1, 201-8
shall bo processed and must be decided-within ninety (90) days
from the filing of the VAT refund application; an^
(2) All pending VAT refund claims as of December 31, 2017 
shall be fully paid in cash by December 31, 2019r] Provided, 
FURTHER, That the [Department of Finance] DOF shall establish


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a VAT refund center [in the Bureau of Mcrnal Revenue and in
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the Bureau of Custorns] WITHIN ITS REVENUE OPERATIONS
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GROUP (ROG) that will handle the ELECTRONIC processing
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and granting of cash refunds of creditable input tax.
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XX X,A
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SEC. 8. Section 109 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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"SEC. 109. Exempt Transactions. —
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(1) Subject to the provisions of the Subsection (2) hereof, the
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following transactions shall be exempt from the value-added
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tax:
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"x X x"
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(U) Importation of fuel, goods and supplies [by persons
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engaged 4n intcrnationol shipping or air transport operations:
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Providcdj^Vnui the fuel, goods and supplies shall-be] used for
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international shipping or air transport operations;
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"xxx."
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SEC. 9. Section 112 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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"SEC. 112. Refunds of Input Tax.-
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"(A) Zero-rated or Effectively Zero-rated Sales. - xxx
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"(B) Cancellation of VAT Registration. - xxx
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"(C) Period within which the Refund of Input Taxes shall be
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Made. - In proper cases, the [Commissioner] SECRETARY OF
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FINANCE shall grant a refund for creditable input taxes within
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ninety (90) days from the date of submission of CERTIFIED TRUE
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COPIES OF invoices and other documents SPECIFICALLY
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LIMITED TO THOSE PRESCRIBED IN THE REVENUE
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ISSUANCES AND in support of the application filed in accordance
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with Subsections (A) and (B) hereof: Provided, That for this
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purpose, the VAT refund claims SHALL BE PROCESSED BY THE
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REVENUE OPERATIONS GROUP UNDER THE DOF AND THE
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CLAIMS shall be classified into low-, medium-, and high-risk 
claims, with the risk classification TO BE based on THE amount of 
VAT refund claim, tax compliance history, frequency of filing VAT 
refund claims [, among others]: Provided, further, That medium- 
and high-risk claims shall be subject to audit or other verification 
processes in accordance with the Bureau of Internal Revenue's 
national audit program for the relevant Provided, finally, That 
s]. Should the [Commissienef] SECRETARY OF FINANCE find 
that the grant of refund is not proper, the [Commissioner] 
SECRETARY OF FINANCE must [state] COMMUNICATE TO 
THE TAXPAYER in writing the DEFICIENCIES OF THE VAT 
REFUND CLAIM, AND THE legal and factual basis for the denial 
within the ninety (90)-day period AND PROVIDE THE TAXPAYER 
FIFTEEN (15) DAYS FROM THE RECEIPT OF THE DENIAL TO 
FILE AND SUBSTANTIATE A REQUEST FOR 
RECONSIDERATION. THE SECRETARY SHALL RENDER A 
DECISION RESOLVING THE TAXPAYER'S REQUEST FOR 
RECONSIDERATION WITHIN FIFTEEN (15) DAYS AFTER 
THE RECEIPT OF THE REQUEST FOR RECONSIDERATION. 
THE DENIAL SHALL BECOME FINAL IF THE TAXPAYER 
FAILS TO FILE A REQUEST FOR RECONSIDERATION 
WITHIN THE FIFTEEN (15)-DAY PERIOD.
"In case of full or partial denial of the claim for tax refund, 
or [the] failure on the part of the Commissioner to act on the 
application within the period prescribed above, the taxpayer 
affected may, within thirty (30) days from the receipt of the decision
DENYING THE REQUEST FOR RECONSIDERATION [denying 
the claim] or after the expiration of the FIFTEEN (15)-DAY 
PERIOD TO FILE A REQUEST FOR RECONSIDERATION 
[ninety (90) day period] IN CASES WHERE NO ACTION IS 
MADE BY THE BUREAU OF INTERNAL REVENUE, appeal the 
decision with the Court of Tax Appeals: Provided, however. That
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failure on the part of any official, agent, or employee of the [Bureau
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of Internal Revenue] DEPARTMENT OF FINANCE to act on the
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application FOR THE GRANT OF VAT REFUND within THE ninety
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(90)-[days]DAY period AND ON THE MOTION FOR
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RECONSIDERATION WITHIN THE FIFTEEN (15)-DAY
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PERIOD shall be punishable under Section 269 of this Code.
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"(D) Manner of Giving Refund. - Refunds shall be made upon
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warrants drawn by the [Commissioner] SECRETARY or by his duly
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authorized representative without the necessity of being
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countersigned by the Chairperson[,] OF THE Commission on Audit,
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the provisions of the Administrative Code of 1987 to the contrary
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notwithstanding: Provided, That refunds under this paragraph shall
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be subject to post audit by the Commission on Audit following the
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risk-based classification above-described: PROVIDED, FURTHER,
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THAT, THE DOF SHALL PUBLISH STATISTICS ON THE
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AGGREGATED VOLUME, PROCESSING TIME, AND RATE OF
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APPROVAL OF REFUND CLAIMS, AND OTHER RELEVANT
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STATISTICS IN THEIR OFFICIAL WEBSITES: PROVIDED,
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[further,FINALLY, That in case of disallowance by the
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Commission on Audit, only the taxpayer shall be liable for the
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disallowed amount without prejudice to any administrative liability
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on the part of any employee of the DEPARTMENT OF FINANCE
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[Bureau of Internal Revenue] who may be found to be grossly
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negligent in the grant of refund.
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SEC. 10. Section 292 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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"SEC. 292. Extent of Authority to Grant Tax Incentives. - The Fiscal
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Incentives Review Board [7] or the Investment Promotion Agencies, under
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a delegated authority from the Fiscal Incentives Review Board, shall grant
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the appropriate tax incentives provided in this Title to be granted to
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registered business enterprises only to the extent of their approved
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registered project or activity under the Strategic Investment Priority Plan
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(SIPP)[.L TAKING INTO CONSIDERATION THE INFUSION OF
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INVESTMENT CAPITAL, EMPLOYMENT GENERATION, AND OTHER
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STANDARD AND PROJECT-SPECIFIC PERFORMANCE METRICS OF
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THE REGISTERED PROJECT OR ACTIVITY THAT MAY BE IMPOSED
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BY THE FISCAL INCENTIVES REVIEW BOARD OR THE
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INVESTMENT PROMOTION AGENCIES.
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SEC. 11. Section 293 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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"Sec. 293. Definitions. - When used in this Title:
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"(A) Capital equipment refers to machinery, equipment, major
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components thereof, tools, devices, applications or apparatus, which are
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directly ATTRIBUTABLE TO [or reasonably needed in] the registered
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project or activity of the registered enterprise;
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"(B) CERTIFICATE OF AUTHORITY TO IMPORT REFERS TO
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THE DOCUMENT ISSUED BY THE INVESTMENT PROMOTION
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AGENCIES AS PROOF OF ENTITLEMENT FOR VALUE-ADDED TAX
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AND DUTY-FREE IMPORTATION WHICH SHALL CONTAIN THE
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LIST OF CAPITAL EQUIPMENT, RAW MATERIALS, SPARE PARTS
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OR ACCESSORIES TO BE IMPORTED THAT ARE DIRECTLY
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ATTRIBUTABLE IN THE PRODUCTION OF GOODS AND SERVICES,
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INCLUDING GOODS USED FOR ADMINISTRATIVE PURPOSES;
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"(C) CERTIFICATE OF REGISTRATION REFERS TO THE
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DOCUMENT EVIDENCING REGISTRATION WITH AN INVESTMENT
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PROMOTION AGENCY AND ENTITLEMENT TO TAX INCENTIVES:
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PROVIDED, THAT EACH REGISTERED PROJECT OR ACTIVITY OF
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A REGISTERED BUSINESS ENTERPRISE SHOULD BE SUPPORTED
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BY A SEPARATE CERTIFICATE OF REGISTRATION;
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"(D) HIGH-VALUE DOMESTIC MARKET ENTERPRISES
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REFER TO REGISTERED DOMESTIC MARKET ENTERPRISES WITH
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AN INVESTMENT CAPITAL EXCEEDING TWENTY BILLION PESOS
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(PHP20/000/000a000.00)/ or with export sales in the 
IMMEDIATELY PRECEDING YEAR OF AT LEAST ONE HUNDRED 
MILLION US DOLLARS (USD100,000,000.00), OR ITS 
EQUIVALENT IN AN ACCEPTABLE FOREIGN CURRENCY: 
PROVIDED, FURTHER, THAT THE THRESHOLD AMOUNT 
PROVIDED HEREIN MAY BE INCREASED BY THE FISCAL 
INCENTIVES REVIEW BOARD;
"[(^](E) X X X
"[^](F) XXX
"[(^](G) XXX
"[(£)](H) X X X
"[(f)](I) Freeport zones refer to [aft] isolated and policed 
[area]AREAS adjacent to a port of entry, which shall be operated and 
managed [os a separate customs territory] FOR PURPOSES OF [te 
ensure] ENSURING free flow or movement of goods BETWEEN 
REGISTERED BUSINESS ENTERPRISES, except those expressly 
prohibited by law, within, into, and exported out of the freeport zone 
where imported goods may be unloaded for immediate transshipment or 
stored, repacked, sorted, mixed, or otherwise manipulated SUBJECT TO 
THE PROVISIONS OF SECTION 294(D) AND (E) AND 295(D) AND 
(E): [withotit-bcing subject to import duties. However, movement of these
imported goods from the free-trade area to a non-frcc trade area in the
country shall be subject to all applicable internal revenue taxes and
duties:] Provided, That [for the freeport to qualify as a separate customs 
territory7] a freeport shall have a permanent customs control or customs 
office at its perimeter: PROVIDED, FURTHER, THAT POINTS OF EXIT 
OF GOODS FROM THE TERRITORY OF THE FREEPORT ZONES TO 
THE OTHER PARTS OF THE PHILIPPINE TERRITORY SHALL BE 
CONSIDERED PORTS OF ENTRY AND POLICED AS SUCH;
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"(3) INVESTMENT CAPITAL REFERS TO THE VALUE OF 
INVESTMENT INDICATED IN PHILIPPINE CURRENCY, THAT 
SHALL BE USED TO CARRY OUT A REGISTERED PROJECT OR 
ACTIVITY SUCH AS PRE-OPERATING EXPENSES, COST OF LAND 
AND LAND IMPROVEMENTS, BUILDINGS, LEASEHOLD 
IMPROVEMENTS, WORKING CAPITAL, AND MACHINERY AND 
EQUIPMENT, INVENTORY AND OTHER CURRENT AND NON- 
CURRENT ASSETS;
"[(H)](K) Investment Promotion Agencies refer to government 
entities created by law, executive order, decree, or other issuances, in 
charge of promoting investments, granting and administering tax and non­
tax incentives, and overseeing the operations of the different economic 
zones and freeports in accordance with their respective special laws. These 
include the Board of Investments (BOI), [Regional Board of Investments 
—Autonomous—Region—in—Muslim—Mindartae—(RBOI------ ARMM)]
BANGSAMORO BOARD OF INVESTMENTS (BBOI), BANGSAMORO 
ECONOMIC ZONE AUTHORITY (BEZA), Philippine Economic Zone 
Authority (PEZA), Bases Conversion and Development Authority (BCDA), 
Subic Bay Metropolitan Authority (SBMA), Clark Development Corporation 
(CDC), John Hay Management Corporation (JHMC), Poro Point 
Management Corporation (PPMC), Cagayan Special Economic Zone 
Authority (CEZA), Zamboanga City Special Economic Zone and Freeport 
Authority (ZCSEZA), PHIVIDEC Industrial Authority (PIA), Aurora Pacific 
Economic Zone Authority (APECO), Authority of the Freeport Area of 
Bataan (AFAB), Tourism Infrastructure [and]. Enterprise Zone Authority 
(TIEZA), BULACAN SPECIAL ECONOMIC ZONE AND FREEPORT 
AUTHORITY (BEZA), and all other similar existing authorities or that 
may be created by law unless otherwise specifically exempted from the 
coverage of this Code.
[(I)](L) X X X
(M) NET BOOK VALUE REFERS TO HISTORICAL COST 
LESS ACCUMULATED DEPRECIATION, AS APPEARING IN THE
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REGISTERED BUSINESS ENTERPRISE'S BOOKS OF ACCOUNTS OR 
FINANCIAL STATEMENTS, AND DETERMINED IN ACCORDANCE 
WITH ACCEPTED ACCOUNTING STANDARDS;
[(J)](N)
[(K)](0)
[(L)](P)
[(M)](Q)
[(N)](R)
miis)
[fP)](T)
[fO)](U)
[W](V)
XXX 
XXX 
XXX 
XXX 
XXX 
X X x; 
X X x; 
X X x;
X X x; Special economic zone or ecozone refers to a 
selected area [, which-sholl be operated and managed os a separate 
customs-terfitery] that is highly developed or has the potential to be 
developed into an agro-industrial, industrial, information technology, or 
tourist/recreational area, whose metes and bounds are fixed or delimited 
by presidential proclamations and within a specific geographical area 
which includes industrial estates (lEs), export processing zones (EPZs), 
ICT parks and centers, and free trade zones: Provided, That [for the 
ecozone to qualify os o separate customs territory/] an ecozone shall have 
a permanent customs control or customs office at its perimeter: Provided, 
however, That areas where mining extraction is undertaken shall not be 
declared as an ecozone: Provided, further, That vertical economic zones, 
such as, but not limited to, buildings, selected floors within buildings, and 
selected areas on a floor, need to comply with the minimum contiguous 
land area as determined by the Fiscal Incentives Review Board; and
[fS)](W) X X x;
"(X) TECHNICAL OBSOLESCENCE MEANS THE DESIGN OR 
SPECIFICATION OF THE ASSET NO LONGER FULFILLS THE 
FUNCTION FOR WHICH IT WAS ORIGINALLY DESIGNED AND/OR 
THE MACHINERY, EQUIPMENT, SPARE PARTS AND/OR 
MATERIALS HAS DIMINISHED IN VALUE AS CAUSED BY
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CHANGES IN TECHNOLOGY AND NEW INVENTIONS, RENDERING 
IT LESS DESIRABLE IN THE INDUSTRY, INCLUDING A DECLINE 
IN VALUE DUE TO IMPROVED ALTERNATIVES BECOMING 
AVAILABLE THAT ARE MORE COST EFFECTIVE, OR DUE TO THE 
AVAILABILITY OF MORE ADVANCED TECHNOLOGY THAT 
ALLOWS FOR MORE EFFICIENCY SUCH AS EARLIER 
REPLACEMENT OF INFORMATION TECHNOLOGY ASSETS, AS MAY 
BE VERIFIED AND APPROVED BY THE INVESTMENT PROMOTION 
AGENCY; AND
"(Y) "DIRECTLY ATTRIBUTABLE" SHALL INCLUDE ANY 
GOODS AND SERVICES THAT ARE INCIDENTAL TO AND 
REASONABLY NECESSARY FOR THE REGISTERED PROJECT OR 
ACTIVITY OF THE REGISTERED ENTERPRISE: PROVIDED, THAT 
THE SOLE AND FINAL DETERMINATION OF WHAT SHALL BE 
CONSIDERED AS "DIRECTLY ATTRIBUTABLE" TO THE 
REGISTERED PROJECT OR ACTIVITY OF THE REGISTERED 
ENTERPRISE SHALL BE WITH THE RELEVANT INVESTMENT 
PROMOTION AGENCY: PROVIDED, FURTHER, THAT NO 
APPROVAL BY SUCH INVESTMENT PROMOTION AGENCIES 
SHALL BE REQUIRED FOR THE SALE AND PURCHASE OF GOODS 
AND SERVICES TO BE ENTITLED TO THE INCENTIVES HEREIN."
22 
"X X X."
23 
SEC. 12. Section 294 of the National Internal Revenue Code of 1997, as
24 
amended, is hereby further amended to read as follows:
25 
"SEC. 294. Incentives. - Subject to the conditions and period of
26 
availment in Sections 295, [an4] 296, AND 296-A respectively, the
27 
following types of tax incentives may be granted to registered projects or
28 
activities:
29 
(A) Income Tax Holiday (UH). - FOR ALL REGISTERED
30 
BUSINESS ENTERPRISES, EXEMPTION FROM INCOME TAX;
31 
(B) Special Corporate Income Tax (SCIT) Rate. - For export
32 
enterprise, a tax rate equivalent to 5% [effective-July 1, 2020,] based on
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the gross income earned, in lieu of all national and local taxes, LOCAL 
FEES AND CHARGES.
"X X X.
"(C) Enhanced Deductions REGIME (EDR). - For export 
enterprise and domestic market enterprise, the following may be allowed 
as deductions:
"(1) XXX 
"(2) XXX
"(3) XXX 
"(4) XXX 
"(5) XXX
"(6) [Fifty percent (50%)] ONE HUNDRED PERCENT 
(100%) additional deduction on power expense incurred in the 
taxable year;
"(7) Deduction for reinvestment allowance to manufacturing 
AND TOURISM industr[y]IES. - When a manufacturing OR 
TOURISM registered business enterprise reinvests its 
undistributed profit or surplus in MANUFACTURING OR 
TOURISM [any of the] projects or activities, RESPECTIVELY, 
THAT ARE listed in the [Strategic Investment Priority Plan] SIPP, 
the amount reinvested to a maximum of fifty percent (50%) shall 
be allowed as a deduction from its taxable income within a period 
of five (5) years from the time of such reinvestment[^-and]: 
PROVIDED, THAT THIS DEDUCTION CAN ONLY BE 
AVAILED OF UNTIL DECEMBER 31, 2034;
"(8) FIFTY PERCENT (50%) ADDITIONAL 
DEDUCTION ON EXPENSES RELATING TO EXHIBITIONS, 
TRADE MISSIONS OR TRADE FAIRS; AND
"[(8)](9) Enhanced Net Operating Loss Carry-Over 
(NOLCO). - The net operating loss of the registered project or 
activity during the first three (3) years from the start of commercial 
operation, which had not been previously offset as deduction from
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gross income, may be carried over as deduction from gross income
2 
within the next five (5) consecutive taxable years immediately
3 
following the LAST year of [such loss] THE ITH ENTITLEMENT
4 
PERIOD OF THE PROJECT.
5 
"(D) Duty exemption on importation of capital equipment, raw
6 
materials, spare parts, or accessories, INCLUDING GOODS USED FOR
7 
ADMINISTRATIVE PURPOSES of the registered project or activity;
8 
[and]
9 
"(E) Value-Added Tax (VAT) exemption on importation and VAT
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zero-rating on local purchases^;
11 
"(F) REGISTERED BUSINESS ENTERPRISE LOCAL TAX. -
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THERE SHALL BE IMPOSED A REGISTERED BUSINESS
13 
ENTERPRISE LOCAL TAX AT THE RATE OF TWO PERCENT (2%)
14 
BASED ON GROSS INCOME OF REGISTERED BUSINESS
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ENTERPRISES DURING THE ITH AND EDR AS PROVIDED UNDER
16 
SECTIONS 294 (A) AND (C) OF THIS CODE, RESPECTIVELY,
17 
WHICH SHALL BE IN LIEU OF ALL LOCAL TAXES, FEES, AND
18 
CHARGES IMPOSED BY THE LOCAL GOVERNMENT UNIT UNDER
19 
REPUBLIC ACT NO. 7160 OR THE LOCAL GOVERNMENT CODE OF
20 
1991: PROVIDED, THAT REAL PROPERTY TAXES SHALL REMAIN
21 
TO BE IMPOSED ON LAND OWNED BY DEVELOPERS.
22 
SEC. 13. Section 295 of the National Internal Revenue Code of 1997, as
23 
amended, is hereby further amended to read as follows:
24 
"SEC. 295. Conditions of Avaiiment. - The AVAILMENT OF tax
25 
incentives in the preceding Section shall be governed by the following
26 
rules AT THE OPTION OF 
THE REGISTERED BUSINESS
27 
ENTERPRISE:
28 
["(A) The-income tax holiday sholl be followed by the Special
29 
Corporate-Income Tax Rate or Enhanced Deductions .
30 
"(B) At the option of-thc export enterprise, the Special Corporate
31 
Income Tax rate or enhanced deductions shall be granted: Provided, That
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in no case shall the enhanced deductions be granted simultaneously with
the Special Corporate Income Tax.]
(A) FOR REGISTERED EXPORT ENTERPRISES:
(1) ITH SHALL BE FOLLOWED BY SCIT OR EDR; OR
(2) SCIT, WHICH SHALL BE IN LIEU OF ALL 
NATIONAL AND LOCAL TAXES, FEES AND CHARGES, 
EXCEPT REAL PROPERTY TAXES ON LAND OWNED BY 
DEVELOPERS OR EDR, MAY BE GRANTED IMMEDIATELY AT 
THE START OF COMMERCIAL OPERATIONS; OR
(3) EDR, WHICH MAY BE GRANTED IMMEDIATELY 
AT THE START OF COMMERCIAL OPERATIONS:
PROVIDED, THAT THE ELECTED INCENTIVE 
PACKAGE SHALL BE IRREVOCABLE FOR THE ENTIRE 
DURATION OF ENTITLEMENT TO SUCH INCENTIVES 
UNDER SECTION 296 OF THIS CODE: PROVIDED, 
FURTHER, THAT IN NO CASE SHALL THE EDR BE GRANTED 
SIMULTANEOUSLY WITH THE SCIT.
(B) FOR REGISTERED DOMESTIC MARKET ENTERPRISES:
(1) ITH SHALL BE FOLLOWED BY EDR; OR
(2) EDR MAY BE GRANTED IMMEDIATELY AT THE 
START OF COMMERCIAL OPERATIONS:
PROVIDED, THAT THE ELECTED INCENTIVE 
PACKAGE SHALL BE IRREVOCABLE FOR THE ENTIRE 
DURATION OF ENTITLEMENT TO SUCH INCENTIVES 
UNDER SECTION 296 OF THIS CODE.
"The following conditions for the availment of each enhanced 
[deductions] DEDUCTION shall be complied with:
"(1) XXX 
"(2) XXX 
"(3) XXX 
"(4) XXX 
"(5) XXX
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"(6) The additional deductions on power expense shall only apply 
to power utilized for the registered project or activity.
"(7) The deduction for reinvestment allowance to manufacturing 
AND TOURISM industr[y]IES shall be determined in the [Strategic 
Investment Priority Plan] SIPP;
"(8) THE ADDITIONAL DEDUCTION ON EXPENSES 
RELATING TO TRADE FAIRS, EXHIBITIONS, OR TRADE 
MISSIONS SHALL INCLUDE EXPENSES INCURRED IN 
PROMOTING THE EXPORT OF GOODS OR THE PROVISION OF 
SERVICES TO FOREIGN MARKETS APPROVED BY THE 
CONCERNED INVESTMENT PROMOTION AGENCY.
THE DEPARTMENT OF FINANCE, IN COORDINATION WITH 
THE BUREAU OF INTERNAL REVENUE AND INVESTMENT 
PROMOTION AGENCIES, SHALL PRESCRIBE THE TERMS AND 
CONDITIONS ON THE GRANT OF ENHANCED DEDUCTIONS 
REGIME UNDER SECTIONS 294(C) AND THIS SECTION.
"(C) The duty exemption shall only apply to the importation of 
capital equipment, raw materials, spare parts, or accessories directly [an^ 
cxcluGivoly used in] ATTRIBUTABLE TO the registered project or activity 
by registered business enterprises, INCLUDING GOODS USED FOR 
ADMINISTRATIVE PURPOSES: Provided, That the following conditions 
are complied with:
"(1) The capital equipment, raw materials, spare parts, or 
accessories, are directly ATTRIBUTABLE TO [and -reasonably 
needed and will be used exclusively in and as part of the direct eest
ef] the registered project or activity of the registered business 
enterprise, INCLUDING GOODS USED FOR 
ADMINISTRATIVE PURPOSES, and are not produced or 
manufactured domestically in sufficient quantity or of comparable 
quality and at reasonable prices. Prior approval of the Investment 
Promotion Agency [may] MUST be secured for the part-time 
utilization of said capital equipment, raw materials, spare parts, or
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accessories in a non-registered project or activity to maximize 
usage thereof: PROVIDED, THAT THE REGISTERED 
BUSINESS ENTERPRISE SHALL ADOPT A METHOD TO BEST 
ALLOCATE THE SAME AT THE TIME OF APPLICATION FOR 
THE ISSUANCE OF A CERTIFICATE OF AUTHORITY TO 
IMPORT, OR ITS EQUIVALENT; Provided, FURTHER, That the 
proportionate taxes and duties are paid on a specific capital 
equipment, raw materials, spare parts, or accessories in proportion 
to the utilization for non-registered projects or activities. In the 
event that the capital equipment, raw materials, spare parts, or 
accessories shall be used for a non-registered project or activity of 
the registered business enterprise at any time within the first five 
(5) years from THE date of importation, the registered business 
enterprise shall first seek prior approval of the concerned 
Investment Promotion Agency and pay the taxes and customs 
duties that were not paid upon the importation; and
"(2) The approval of the Investment Promotion Agency was 
obtained by the registered business enterprise prior to the 
importation of such capital equipment, raw materials, spare parts, 
or accessories.
"AN INVESTMENT PROMOTION AGENCY MAY 
AUTHORIZE THE IMPORTATION OF CAPITAL EQUIPMENT, 
RAW MATERIALS, SPARE PARTS, OR ACCESSORIES, 
PENDING ISSUANCE OF THE CERTIFICATE OF 
REGISTRATION, SUBJECT TO THE POSTING OF 
PERFORMANCE BOND OR BANK GUARANTEE EQUIVALENT 
TO DUTIES AND TAXES WAIVED ON SUCH IMPORTATIONS 
AND OTHER CONDITIONS AS MAY BE DETERMINED BY 
THE CONCERNED INVESTMENT PROMOTION AGENCY AND 
THE BUREAU OF CUSTOMS.
"NO TAXES AND DUTIES SHALL BE IMPOSED ON 
SUBSEQUENT SALE, TRANSFER, OR DISPOSITION OF THE
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CAPITAL EQUIPMENT, RAW MATERIALS, SPARE PARTS, 
OR ACCESSORIES, WHICH WERE GRANTED TAX AND 
CUSTOMS DUTY EXEMPTION HEREUNDER [W]within the first 
five (5) years from date of importation, approval of the Investment 
Promotion Agency must be secured before the sale, transfer, or 
disposition of the capital equipment, raw materials, spare parts, or 
accessories, which were granted tax and customs duty exemption 
hereunder, and shall be allowed only under ANY OF the following 
circumstances:
"(a) If made to another enterprise availing customs 
duty exemption on imported capital equipment, raw 
materials, spare parts, or accessories;
"[(b) If made to another enterfirise-not availing of 
dtrty—exemption on imported capital equipment, raw
matefiafsrsparc parts, or acccsGorics, upon payment of any
taxes and duties due on the not book value of the capital
equipment, raw materials, spare parts, or acccGsoricG to be
seldj]
"[(^](B) Exportation of capital equipment, raw materials, 
spare parts, accessories, source documents, or those required for 
pollution abatement and control; OR
"[(d)—Proven—technical—obsolescence—of the—capital 
cquipmcntrfaw-matorial9,-sparcpart-S7-or^e€essGrics-;-er]
"[(e)](C) If donated to the GOVERNMENT OF THE 
PHILIPPINES OR TO ANY OF ITS AGENCIES OR POLITICAL 
SUBDIVISIONS, 
INCLUDING 
FULLY-OWNED
GOVERNMENT CORPORATIONS, TESDA, State Universities and 
Colleges (SUCs), or DepEd and CHED-accredited schools: Provided, 
That the donation shall be exempt from import duties and taxes, 
including donor's tax.
"IN CASE OF SUBSEQUENT SALE, TRANSFER, OR 
DISPOSITION OF TAX AND DUTY-FREE CAPITAL
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EQUIPMENT, RAW MATERIALS, SPARE PARTS, OR 
ACCESSORIES WITHIN THE FIRST FIVE (5) YEARS FROM 
DATE OF IMPORTATION AND UPON APPROVAL BY THE 
INVESTMENT PROMOTION AGENCY, THERE SHALL BE 
TAXES AND DUTIES ASSESSED BASED ON THE NET BOOK 
VALUE OF THE CAPITAL EQUIPMENT, RAW MATERIALS, 
SPARE PARTS OR ACCESSORIES:
"(A) IF MADE TO ANOTHER ENTERPRISE NOT 
AVAILING OF DUTY EXEMPTION ON IMPORTED 
CAPITAL EQUIPMENT, RAW MATERIALS, SPARE 
PARTS, OR ACCESSORIES; OR
"(B) IF THERE IS PROVEN TECHNICAL 
OBSOLESCENCE OF THE CAPITAL EQUIPMENT, RAW 
MATERIALS, SPARE PARTS, OR ACCESSORIES. 
''Provided, That if the registered business enterprise sells, 
transfers, or disposes the aforementioned imported items without 
prior approval, the registered business enterprise and the vendee, 
transferee, or assignee shall be solidarily liable to pay twice the 
amount of the duty exemption that should have been paid during 
its importation: Provided, further. That the sale, transfer, or 
disposition of the capital equipment, raw materials, spare parts, or 
accessories made after five (5) years from date of importation shall 
require that prior notice be given by the registered business 
enterprise to the Investment Promotion Agency: Provided, [finally] 
FURTHERMORE, That even if the sale, transfer, or disposition of 
the capital equipment, raw materials, spare parts or accessories 
was made after five (5) years from date of importation with notice 
to the Investment Promotion Agency, the registered business 
enterprise is still liable to pay the duties based on the net book 
value of the capital equipment, raw materials, spare parts, or 
accessories if it has violated any of its registration terms and 
conditions.
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"(D) The VAT exemption on importation and VAT zero-rating on 
iocai purchases shaii only apply to goods and services directly [af»d^ 
exclusively used in] ATTRIBUTABLE TO the registered project or 
activity, INCLUDING EXPENSES INCIDENTAL THERETO, ^ OF a 
registered EXPORT ENTERPRISE, OR A REGISTERED HIGH-VALUE 
DOMESTIC MARKET ENTERPRISE, [business enterpriser] WHICH 
SHALL INCLUDE JANITORIAL SERVICES, SECURITY SERVICES, 
FINANCIAL SERVICES, CONSULTANCY SERVICES, MARKETING 
AND PROMOTION, AND SERVICES RENDERED FOR 
ADMINISTRATIVE OPERATIONS SUCH AS HUMAN RESOURCES, 
LEGAL, AND ACCOUNTING: PROVIDED, THAT THE PROJECT OR 
ACTIVITY REGISTERED WITH THE INVESTMENT PROMOTION 
AGENCY SHALL BE SUBJECT TO THE FOLLOWING CONDITIONS:
"(1) SALE OF GOODS OR SERVICES BY A VAT- 
REGISTERED SELLER TO A REGISTERED EXPORT 
ENTERPRISE, REGARDLESS OF LOCATION, SHALL BE 
SUBJECT TO ZERO PERCENT (0%) VAT;
"(2) SALE, TRANSFER, OR DISPOSAL OF 
PREVIOUSLY VAT-EXEMPT IMPORTED CAPITAL 
EQUIPMENT, RAW MATERIALS, SPARE PARTS, AND 
ACCESSORIES SHALL BE SUBJECT TO THE FOLLOWING 
RULES:
I. IF THE PURCHASER IS A REGISTERED EXPORT 
ENTERPRISE, REGARDLESS OF LOCATION, 
THE TRANSACTION SHALL BE SUBJECT TO 
ZERO PERCENT (0%) VAT;
II. IF THE SELLER IS A REGISTERED DOMESTIC 
MARKET ENTERPRISE, REGARDLESS OF 
LOCATION, THE TRANSACTION SHALL BE 
SUBJECT TO TWELVE PERCENT (12%) VAT 
BASED ON THE NET BOOK VALUE OF THE
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CAPITAL EQUIPMENT, RAW MATERIALS, 
SPARE PARTS, OR ACCESSORIES; AND 
III. IF THE SELLER IS A REGISTERED DOMESTIC 
MARKET ENTERPRISE AND THE PURCHASER 
IS A REGISTERED EXPORT ENTERPRISE, 
REGARDLESS OF LOCATION, THE 
TRANSACTION SHALL BE SUBJECT TO ZERO 
PERCENT (0%) VAT:
"ANY REGISTERED EXPORT ENTERPRISE THAT FAILS TO 
MEET THE SEVENTY PERCENT (70%) EXPORT SALES IN THE 
IMMEDIATELY PRECEDING YEAR OR HIGH-VALUE DOMESTIC 
MARKET ENTERPRISE THAT FAILS TO MEET THE EXPORT SALE 
OR INVESTMENT CAPITAL REQUIREMENT SHALL BE 
DISQUALIFIED FROM AVAILING OF DUTY EXEMPTION ON 
IMPORTATION OF CAPITAL EQUIPMENT, RAW MATERIALS, 
SPARE PARTS, OR ACCESSORIES, VAT EXEMPTION ON 
IMPORTATION, OR VAT ZERO-RATING ON LOCAL PURCHASES IN 
THE IMMEDIATELY SUCCEEDING YEAR.
"Notwithstanding the provisions in the preceding paragraphs, sales 
receipts and other income derived from non-registered project or activity 
shall be subject to appropriate taxes imposed under this Code.
"(E) XXX
"(F) XXX
"(G) XXX
"Registered business enterprises, whose performance 
commitments include job generation, shall maintain their employment 
levels to the extent practicable, and in the case of reduced employment 
or when the performance commitment for job generation is not met, the 
registered business enterprises must submit to their respective 
Investment Promotion Agencies and the Fiscal Incentives Review Board 
their justifications for the same."
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'(H) THE REGISTERED BUSINESS ENTERPRISE LOCAL TAX
2 
SHALL BE IMPOSED ON A REGISTERED BUSINESS ENTERPRISE
3 
FOR AS LONG AS IT MEETS THE CONDITIONS FOR ITS
4 
REGISTRATION, DURING THE PERIOD OF AVAILMENT OF THE
5 
ITH AND THE EDR.
6 
"THE TAX SHALL BE DIRECTLY REMITTED BY THE
7 
REGISTERED BUSINESS ENTERPRISE TO THE TREASURER'S
8 
OFFICE OF THE MUNICIPALITY OR CITY WHERE THE
9 
ENTERPRISE IS LOCATED.
10 
"WHERE TWO (2) OR MORE LOCAL GOVERNMENT UNITS
11 
COVER THE SAME ENTERPRISE, THE SHARING BETWEEN SUCH
12 
LOCAL GOVERNMENT UNITS SHALL BE AS FOLLOWS:
13 
1. FIFTY PERCENT (50%) OF REVENUES SHALL BE
14 
SHARED EQUALLY AMONG THE LOCAL GOVERNMENT
15 
UNITS; AND
16 
2. FIFTY PERCENT (50%) OF REVENUES SHALL BE
17 
APPORTIONED BASED ON THE POPULATION OF THE
18 
LOCAL GOVERNMENT UNITS.
19 
"FIFTY PERCENT (50%) OF THE SHARE OF THE
20 
MUNICIPALITY BASED ON THE FOREGOING ALLOCATION SHALL
21 
BE REMITTED 
TO THE PROVINCE WHERE THE SAID
22 
MUNICIPALITY IS LOCATED: PROVIDED THAT, FOR CITIES, IT
23 
SHALL RETAIN ONE HUNDRED PERCENT (100%) OF ITS SHARE.
24 
" LOCAL GOVERNMENT UNITS MAY REDUCE OR WAIVE THE
25 
RATE OF TAX, OR THEIR SHARE THEREOF IN THE CASE OF TWO
26 
(2) OR MORE LOCAL GOVERNMENT UNITS COVERING THE SAME
27 
ENTERPRISE.
28 
SEC. 14. A new Section 295-A shall be introduced in the National Internal
29 
Revenue Code of 1997, as amended. The new Section 295-A shall read as follows:
30 
"SEC. 295-A. REGISTERED BUSINESS ENTERPRISES
31 
TAXPA YERSERVICE. -THERE IS HEREBY CREATED A SEPARATE
32 
SERVICE WITHIN THE BUREAU OF INTERNAL REVENUE THAT
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WILL SUPPORT THE END-TO-END TAX COMPLIANCE OF
2 
REGISTERED BUSINESS ENTERPRISES. THE COMMISSIONER
3 
SHALL PRESCRIBE THE MANNER AND PLACE OF FILING OF
4 
RETURNS AND PAYMENTS OF TAXES BY REGISTERED
5 
BUSINESS ENTERPRISES THROUGH THE SAID SERVICE. FOR
6 
EASE OF COMPLIANCE WITH TAX RULES AND REGULATIONS,
7 
SIMPLIFIED FILING AND PAYMENT PROCESSES SHALL BE
8 
IMPLEMENTED FOR REGISTERED BUSINESS ENTERPRISES."
9 
SEC. 15. Section 296 of the National Internal Revenue Code of 1997, as
10 
amended, is hereby further amended to read as follows:
11 
"SEC. 296. Period of Availment OF INCENTIVES FOR
12 
PROJECTS OR ACTIVITIES APPROVED BY THE INVESTMENT
13 
PROMOTION AGENCIES. - The period of availment of [incentive]
14 
INCENTIVES GRANTED by the INVESTMENT PROMOTION
15 
AGENCIES TO registered business [enterprise] ENTERPRISES shall be
16 
as follows:
17 
"(A) For export enterprise, [income tax holiday] ITH of four (4)
18 
to seven (7) years, depending on location and industry priorities as
19 
specified in this Section, and followed by [special corporate-income tax
20 
fate] SCIT or [enhanced deductions] EDR for ten (10) years[T], OR SCIT
21 
OR EDR FOR A MAXIMUM PERIOD OF FOURTEEN (14) TO
22 
SEVENTEEN (17) YEARS, DEPENDING ON LOCATION AND
23 
INDUSTRY PRIORITIES, EXCEPT WHEN GRANTED BY THE FISCAL
24 
INCENTIVES REVIEW BOARD UNDER SECTION 296-A OF THIS
25 
TITLE: PROVIDED, THAT REAPPLICATION FOR INCENTIVES
26 
SHALL BE ALLOWED FOR THE SAME REGISTERED PROJECT OR
27 
ACTIVITY ONLY IF SUCH PROJECT OR ACTIVITY EMPLOYS AT
28 
LEAST TEN THOUSAND (10,000) EMPLOYEES AND SHALL BE
29 
MAINTAINED DURING ITS REGISTRATION.
30 
"A qualified expansion or entirely new project or activity registered
31 
under this Act may qualify to avail of incentives, subject to the
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qualifications set forth in the [Strategic-Investment Priority Plan] SIPP 
and performance review by the INVESTMENT PROMOTION AGENCY 
OR Fiscal Incentives Review Board, SUBJECT TO THE INVESTMENT 
CAPITAL THRESHOLD PROVIDED UNDER SECTION 297 (B) OF 
THIS 
Provided, That existing registered projects or activities prior
to the effectivity of this Act may qualify to register and avail of the
incentives granted under this Act for the prescribed period, subject to the
criteria and conditions set-forth in the Strategic Investment Priority Piae;]
"(B) For domestic market enterprise under the [Strategic 
Investment Priority Plan] SIPP, [income tax holiday] ITH for four (4) to 
seven (7) years followed by [enhanced deductions] EDR for [five (S)] 
TEN (10) yearsM, OR EDR FOR A MAXIMUM PERIOD OF 
FOURTEEN (14) TO SEVENTEEN (17) YEARS, DEPENDING ON 
LOCATION AND INDUSTRY PRIORITIES, EXCEPT WHEN 
GRANTED BY THE FISCAL INCENTIVES REVIEW BOARD UNDER 
SECTION 296-A OF THIS TITLE: PROVIDED, THAT 
REAPPLICATION FOR INCENTIVES SHALL BE ALLOWED FOR THE 
SAME REGISTERED PROJECT OR ACTIVITY ONLY IF 
EMPLOYMENT LEVEL FOR SUCH PROJECT OR ACTIVITY IS 
EMPLOYS AT LEAST TEN THOUSAND EMPLOYEES AND SHALL BE 
MAINTAINED DURING ITS REGISTRATION: PROVIDED, 
FURTHER THAT [A] a qualified expansion or entirely new project or 
activity registered under this Act may qualify to avail of incentives, subject 
to the qualifications set forth in the [Strategic Investment Priority Plan] 
SIPP and performance review by the INVESTMENT PROMOTION 
AGENCY IN COORDINATION WITH THE Fiscal Incentives Review 
Board: [Provided, That existing registered projects or activities prior to the 
effectivity of this Act may qualify to register and avail of the incentives
granted under this Act for the prescribed period, subject to the criteria-an^
conditions set forth tn the Strategic Investment Priority-Plafk]
29


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
"The period of availment of the foregoing INCOME TAX-BASED 
incentives shall commence from the actual start of commercial operations 
with the registered business enterprise availing of the tax incentives within 
three (3) years from the date of registration, unless otherwise provided in 
the [Strategic Investment ■ Priority Plan] SIPP and its corresponding 
guidelines. [—Provided, That after-the expiration of the transitory period 
under Section 311 (C), export enterprises register-ed-prior to the effectivity
of this Act-shall have the option to reapply and avail of the incentives
granted-uflder Section 29/l(B) for the same period provided under this
Section, -subject to the conditions and qualifications set forth in the
Strategic Investment Priority Plan and performance review by the Fiscal
Incentives Review Board.]
"xxx."
"(3) Tier III activities shall include (i) research and development 
resulting in demonstrably significant value-added, higher productivity, 
improved efficiency, breakthroughs in science and health, and high-paying 
jobs; (ii) generation of new knowledge and intellectual property registered 
and/or licensed in the Philippines; (iii) commercialization of patents, 
industrial designs, copyrights and utility models owned or co-owned by a 
registered business enterprise; (iv) highly technical manufacturing; or (v) 
are critical to the structural transformation of the economy and require 
substantial catch-up efforts, INCLUDING BUT NOT LIMITED TO 
CYBER-SECURITY, ARTIFICIAL INTELLIGENCE, AND DATA­
CENTER FACILITIES.
25
26
27
28
29
XXX
The period of availment of incentives based on the combination of 
both location and industry priorities, as determined in the [s]Strategic 
[t]Investment [p]Priority [p]Plan, shall be as follows:
For exporters:
30


1
2
Location/Industry
Tiers
Tier I
Tier II
Tier III
Nationai
Capitai Region
4 UH + 10
EDR/scrr, OR
14 EDR/SCIT
5 UH + 10
EDR/SCU, OR
15 EDR/SCIT
6 UH + 10
EDR/SCU, OR
16 EDR/SCIT
Metropoiitan
areas or areas
contiguous
and adjacent
to the Nationai
Capital Region
5 UH + 10
EDR/SCU OR
15 EDR/SCIT
6 UH + 10
EDR/SCU, OR
16 EDR/SCIT
7 UH + 10
EDR/SCU, OR
17 EDR/SCIT
Aii other areas
6 UH + 10
EDR/SCU, OR
16 EDR/SCIT
7 UH + 10
EDR/SCU, OR
17 EDR/SCIT
7 UH + 10
EDR/SCU, OR
17 EDR/SCIT
For domestic market activities:
Location / Ind ustry
Tiers
Tier I
Tier II
Tier III
Nationai Capitai
Region
4 UH + [5] 10
ED, OR 14 ED
5 UH + [5] 10
ED, OR 15 ED
6 UH + [5] 10
ED, OR 16 ED
Metropoiitan areas or
areas contiguous and
adjacent to the
National Capital
Region
5 UH + [5] 10
ED, OR 15 ED
6 UH + [5] 10
ED, OR 16 ED
7 UH + [5] 10
ED, OR 17 ED
All other areas
6 UH + [5] 10
ED, OR 16 ED
7 UH + [5] 10
ED, OR 17 ED
7 UH + [S]10
ED, OR 17 ED
31


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
"In addition to the incentives provided in tiers above, projects or 
activities of registered enterprises located in areas recovering from armed 
conflict or a major disaster, as determined by the Office of the President, 
shall be entitled to two (2) additional years of income tax INCENTIVES 
[holiday].
"Projects or activities registered prior to the effectivity of this Act, 
or under the incentive system provided herein that shall, in the duration 
of their incentives, completely relocate from the National Capital Region, 
shall be entitled to three (3) additional years of income tax INCENTIVES 
[holiday]: Provided, That the additional incentive shall commence at the 
completion of the relocation of operations.
["The industfy-and locational prioritization specified herein shall 
be subject to review and revision-every thr-cc (3) years in accordance with
the Strategic Investment Priority Plan, subject to the standards in Section
300 hereof or in exceptional circumstances, to attract substantial
investment to respond to a situation or crisis or-to target specific
industries.] REGISTERED BUSINESS ENTERPRISES MAY 
CONTINUE TO AVAIL OF THE VAT ZERO-RATING ON LOCAL 
PURCHASES, VAT EXEMPTION ON IMPORTATION, AND DUTY 
EXEMPTION ON IMPORTATION OF CAPITAL EQUIPMENT, RAW 
MATERIALS, SPARE PARTS, OR ACCESSORIES, INCLUDING 
GOODS USED FOR ADMINISTRATIVE PURPOSES, FOR THE 
ENTIRE REGISTRATION PERIOD IF THE REGISTERED BUSINESS 
ENTERPRISES CONTINUE TO MEET THE TERMS AND 
CONDITIONS OF THEIR REGISTRATION WITH THEIR 
RESPECTIVE INVESTMENT PROMOTION AGENCIES AND IF THE 
FOLLOWING REQUIREMENTS ARE MET:
(1) FOR REGISTERED EXPORT ENTERPRISES, 
MAINTAIN AT LEAST SEVENTY PERCENT (70%) OF TOTAL 
ANNUAL PRODUCTION OR OUTPUT AS EXPORT SALES; AND
32


1 
(2) FOR HIGH-VALUE DOMESTIC MARKET
2 
ENTERPRISES, SATISFY THE INVESTMENT CAPITAL OR
3 
EXPORT REQUIREMENT UNDER SECTION 293(D) OF THIS
4 
CODE FOR THE IMMEDIATELY PRECEDING YEAR.
5 
"PROVIDED, FINALLY, THAT THE AVAILMENT PERIOD OF
6 
DUTY EXEMPTION UNDER SECTION 294 (D), AND VAT ZERO-
7 
RATING ON LOCAL PURCHASES AND VAT EXEMPTION ON
8 
SECTION 294 (E) SHALL BE RECKONED FROM THE DATE OF
9 
REGISTRATION."
10 
SEC. 16. A new Section 296-A shall be introduced in the National Internal
11 
Revenue Code of 1997, as amended. The new Section 296-A shall read as follows:
12 
"SEC. 296-A. PERIOD OF A VAILMENT OF INCENTIVES FOR
13 
PROJECTS OR ACTIVITIES APPRO VED BY THE FISCAL INCENTIVES
14 
REVIEW BOARD. - THE PERIOD OF AVAILMENT OF INCENTIVES
15 
GRANTED BY THE FISCAL INCENTIVES REVIEW BOARD TO
16 
REGISTERED BUSINESS ENTERPRISES SHALL BE AS FOLLOWS:
17 
"(A) FOR EXPORT ENTERPRISE, ITH OF FOUR (4) TO SEVEN
18 
(7) YEARS, DEPENDING ON LOCATION AND INDUSTRY
19 
PRIORITIES AS SPECIFIED IN THIS SECTION, AND FOLLOWED BY
20 
SCIT OR EDR FOR TWENTY (20) YEARS, OR SCIT OR EDR FOR A
21 
MAXIMUM PERIOD OF TWENTY-FOUR (24) TO TWENTY-SEVEN
22 
(27), DEPENDING ON LOCATION AND INDUSTRY PRIORITIES.
23 
"(B) FOR DOMESTIC MARKET ENTERPRISE, ITH OF FOUR
24 
(4) TO SEVEN (7) YEARS, FOLLOWED BY EDR FOR TWENTY (20)
25 
YEARS, OR EDR FOR A MAXIMUM PERIOD OF TWENTY-FOUR (24)
26 
TO TWENTY-SEVEN (27) YEARS, DEPENDING ON LOCATION AND
27 
INDUSTRY PRIORITIES.
28 
"PROVIDED, THAT A QUALIFIED EXPANSION OR ENTIRELY
29 
NEW PROJECT OR ACTIVITY REGISTERED UNDER THIS ACT MAY
30 
QUALIFY TO AVAIL OF INCENTIVES, SUBJECT TO THE
33


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
QUALIFICATIONS SET FORTH IN THE SIPP AND PERFORMANCE 
REVIEW BY THE FISCAL INCENTIVES REVIEW BOARD.
"THE PERIOD OF AVAILMENT OF THE FOREGOING 
INCENTIVES SHALL COMMENCE FROM THE ACTUAL START OF 
COMMERCIAL OPERATIONS WITH THE REGISTERED BUSINESS 
ENTERPRISE AVAILING OF THE TAX INCENTIVES WITHIN THREE 
(3) YEARS FROM THE DATE OF REGISTRATION, UNLESS 
OTHERWISE PROVIDED IN THE STRATEGIC INVESTMENT 
PRIORITY PLAN AND ITS CORRESPONDING GUIDELINES.
THE PERIOD OF AVAILMENT OF INCENTIVES BASED ON 
THE COMBINATION OF BOTH LOCATION AND INDUSTRY 
PRIORITIES, AS DETERMINED IN THE STRATEGIC INVESTMENT 
PRIORITY PLAN, SHALL BE AS FOLLOWS:
FOR EXPORTERS:
LOCATION/INDUSTRY
HERS
TIER I
TIER II
TIER III
NATIONAL
CAPITAL REGION
4 ITH + 20
SCIT/EDR,
OR 24
SCIT/EDR
5 ITH + 20
SCIT/EDR,
OR 25
SCIT/EDR
6 ITH + 20
SCIT/EDR,
OR 26
SCIT/EDR
METROPOLITAN AREAS
OR AREAS
CONTIGUOUS AND
ADJACENT TO THE
NATIONAL CAPITAL
REGION
5 ITH + 20
SCIT/EDR,
OR 25
SCIT/EDR
6 ITH + 20
SCIT/EDR,
OR 26
SCIT/EDR
7 ITH + 20
SCIT/EDR
OR 27
SCIT/EDR
ALL OTHER AREAS
6 ITH + 20
SCIT/EDR,
OR 26
7 ITH + 20
SCIT/EDR,
OR 27
7 ITH + 20
SCIT/EDR,
OR 27
34


1
2
3
4
5
6
7
8 
9
LOCATION/INDUSTRY
TIERS
TIER I
TIER II
TIER III
SCIT/EDR
SCIT/EDR
SCIT/EDR
FOR DOMESTIC MARKET ACTIVITIES:
LOCATION/
INDUSTRY
TIERS
TIER I
TIER II
TIER III
NATIONAL
CAPITAL REGION
4 ITH + 20
SCIT/EDR,
OR 24
SCIT/EDR
5 ITH + 20
SCIT/EDR,
OR 25
SCIT/EDR
6 ITH + 20
SCIT/EDR,
OR 26
SCIT/EDR
METROPOLITAN
AREAS OR AREAS
CONTIGUOUS AND
ADJACENT TO THE
NATIONAL CAPITAL
REGION
5ITH + 20
SCIT/EDR,
OR 25
SCIT/EDR
6 ITH + 20
SCIT/EDR,
OR 26
SCIT/EDR
7 ITH + 20
SCIT/EDR,
OR 27
SCIT/EDR
ALL OTHER AREAS
6 ITH + 20
SCIT/EDR,
OR 26
SCIT/EDR
7 ITH + 20
SCIT/EDR,
OR 27
SCIT/EDR
7 ITH + 20
SCIT/EDR,
27 SCIT/EDR
"PROVIDED, THAT REGISTERED BUSINESS ENTERPRISES 
MAY CONTINUE TO AVAIL OF THE VAT ZERO-RATING ON LOCAL 
PURCHASES AND VAT EXEMPTION ON IMPORTATION UNDER 
SECTION 294 (E), AND DUTY EXEMPTION ON IMPORTATION 
UNDER SECTION 294 (D), FOR THE ENTIRE REGISTRATION 
PERIOD IF THE REGISTERED BUSINESS ENTERPRISES CONTINUE 
TO MEET THE TERMS AND CONDITIONS OF THEIR REGISTRATION
35


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21
22
23
24
25
26
27
28 
29
WITH THEIR RESPECTIVE INVESTMENT PROMOTION AGENCIES 
AND IF THE FOLLOWING REQUIREMENTS ARE MET:
(1) 
FOR REGISTERED EXPORT ENTERPRISES, 
MAINTAIN AT LEAST SEVENTY PERCENT (70%) OF TOTAL 
ANNUAL PRODUCTION OR OUTPUT AS EXPORT SALES; AND
(2) 
FOR HIGH-VALUE DOMESTIC MARKET 
ENTERPRISES, SATISFY THE INVESTMENT CAPITAL OR 
EXPORT REQUIREMENT UNDER SECTION 293(D) OF THIS 
CODE FOR THE IMMEDIATELY PRECEDING YEAR.
"PROVIDED, FINALLY, THAT THE AVAILMENT PERIOD OF 
DUTY EXEMPTION ON IMPORTATION OF CAPITAL EQUIPMENT, 
RAW MATERIALS, SPARE PARTS, OR ACCESSORIES, VAT 
EXEMPTION ON IMPORTATION, AND VAT ZERO-RATING ON 
LOCAL PURCHASES SHALL BE RECKONED FROM THE DATE OF 
REGISTRATION.
"IN ADDITION TO THE INCENTIVES PROVIDED IN THE 
TIERS ABOVE, PROJECTS OR ACTIVITIES OF REGISTERED 
ENTERPRISES LOCATED IN AREAS RECOVERING FROM ARMED 
CONFLICT OR A MAJOR DISASTER, AS DETERMINED BY THE 
OFFICE OF THE PRESIDENT, SHALL BE ENTITLED TO TWO (2) 
ADDITIONAL YEARS OF INCOME TAX INCENTIVES.
"PROJECTS OR ACTIVITIES REGISTERED PRIOR TO THE 
EFFECTIVITY OF THIS ACT, OR UNDER THE INCENTIVE SYSTEM 
PROVIDED HEREIN THAT SHALL, IN THE DURATION OF THEIR 
INCENTIVES, COMPLETELY RELOCATE FROM THE NATIONAL 
CAPITAL REGION, SHALL BE ENTITLED TO THREE (3) 
ADDITIONAL YEARS OF INCOME TAX INCENTIVES: PROVIDED, 
THAT THE ADDITIONAL INCENTIVE SHALL COMMENCE AT THE 
COMPLETION OF THE RELOCATION OF OPERATIONS.
36


1 
SEC. 17. Section 297 of the National Internal Revenue Code of 1997, as
2 
amended, is hereby further amended to read as follows:
3 
"SEC. 297. Expanded Functions of the Fiscal Incentives Review Board.
4 
- The functions and powers of the Fiscal Incentives Review Board created
5 
under Presidential Decree No. 776, as amended, shall 
be expanded as
6 
follows:
7 
"(A) To exercise policy-making [and], oversight, REGULATORY,
8 
AND QUASI-JUDICIAL functions on the administration and grant of tax
9 
incentives by the Investment Promotion Agencies and other government
10 
agencies administering tax incentives. In particular, 
the Fiscal Incentives
11 
Review Board shall:
12 
"(1) Determine the target performance metrics as conditions
13 
to avail of tax incentives;
14 
"(2) Review and [audit] MONITOR the compliance of
15 
INVESTMENT PROMOTION AGENCIES AND other government
16 
agencies administering tax incentives, with respect to the
17 
administration and grant of tax incentives and impose sanctions
18 
such as, but not limited to, withdrawal, suspension, or cancellation
19 
of their AUTHORITY [power] to grant tax incentives UNDER
20 
THIS TITLE, WITHOUT PREJUDICE TO THE CONDUCT OF
21 
INQUIRY, INVESTIGATION, AND FILING OF APPROPRIATE
22 
CRIMINAL AND ADMINISTRATIVE CASES AGAINST
23 
ERRING OFFICIALS AND EMPLOYEES IN ACCORDANCE
24 
WITH THE PROCEDURES PRESCRIBED UNDER EXISTING
25 
LAWS;
26 
"[(3)-Determinc the minimum contiguous land arca-tbat
27 
vertical-economic zones should comply-witb-] AND
28 
"im (3) Conduct regular monitoring and evaluation of
29 
investment and non-investment tax incentives, such as using cost-
30 
benefit analysis (CBA) to determine their impact on the economy
37


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
and whether agreed performance targets are met, AND
PRESCRIBE THE DATA REQUIREMENTS FOR THE
APPLICATION OF INCENTIVES TO ALLOW FOR THE
CALCULATION OF COSTS AND BENEFITS UPON
APPLICATION; [an#]
[(5) Check and verify, as ncccssaryr the- compliance of
rcgiGtcrcd business enterprises with the terms and conditions of
their availmcnt, in particular the agreed-target performance
metrics, rules and regulations of this Act> -and-ether-relevant laws
or issuances;]
"FOR THIS PURPOSE, ALL INVESTMENT PROMOTION 
AGENCIES AND OTHER GOVERNMENT AGENCIES 
ADMINISTERING TAX INCENTIVES SHALL FURNISH THE FISCAL 
INCENTIVES REVIEW BOARD WITH ALL ITS ISSUANCES RELATED 
TO THE GRANT AND ADMINISTRATION OF INCENTIVES.
"(B) To approve or disapprove, the grant of tax incentives to the 
extent of the registered project or activity LISTED IN THE NATIONAL 
SIPP upon the recommendation of the Investment Promotion Agency: 
Provided, That the application for tax incentives shall be duly accompanied 
by a cost-benefit analysis: Provided, further. That the INVESTMENT 
PROMOTION AGENCIES SHALL USE THE Fiscal Incentives Review 
Board-PRESCRIBED [shall prescribe - the] data requirements AND 
METHODOLOGIES for the application of incentives FOR THE 
PURPOSE[S] OF [to-allow for the calculation of] CALCULATING THE 
costs and benefits upon application: Provided, further. That the 
INVESTMENT PROMOTION AGENCIES SHALL grant THE [ef] tax 
incentives OF [te] registered projects or activities LISTED EITHER IN 
THE NATIONAL OR LOCAL SIPP with investment capital of [One] 
TWENTY billion pesos (P[T]20,000,000,000.00) and below [shalkbe 
delegated by the Fiscal Incentives Review Board to the conccmcd
Investment Promotion Agency to the extent of the registered project or
38


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
activity]: Provided, furthermore, That the Fiscal Incentives Review Board,
IN CONSULTATION WITH THE INVESTMENT PROMOTION 
AGENCIES, may increase the threshold amount of [One] TWENTY billion 
pesos (P[i]20/000,000,000.00);
"(C) To approve applications for tax subsidies to government- 
owned or -controlled corporations, government instrumentalities, 
government commissaries, and state universities and colleges^;
"For this purpose, the other government agencies shall ensure 
complete submission of applications, documents, records, books, or other 
relevant data or material;
"(D) To formulate ADDITIONAL TIME-BOUND OR place-specific 
PROJECTS OR ACTIVITIES FOR INCLUSION IN THE [strategle 
investment plans] STRATEGIC INVESTMENT PRIORITY PLAN during 
periods of recovery from calamities and post-conflict situations and where 
the Fiscal Incentives Review Board determines that there is a need to 
attract many classes, firms, that would accelerate the growth of a region's 
flagship industries, in accordance with the Medium-Term Development 
Plan, [The Fiscal Incentives Review Board may formulate and approve
place-specific strategic investment plans] and recommend incentives to the 
President, following the same procedure in Section 297;
"(E) To MONITOR CANCELLATION, SUSPENSION, OR 
WITHDRAWAL OF [cancel, suspend, or withdraw] the enjoyment of fiscal 
incentives of concerned registered business enterprises [on its own 
initiative or upon - the recommendation of the Investment Promotion
Agency] BY INVESTMENT PROMOTION AGENCIES for material 
violations of any of the conditions imposed in the grant of fiscal incentives, 
including, but not limited to, the non-compliance of the agreed performance 
commitments and endorse registered business enterprises whose 
incentives are cancelled, suspended, or withdrawn to the concerned 
revenue agencies for the assessment and collection of taxes and duties due 
commencing from the first year of availment;
39


2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21
22
23
24
25
26
27
28
29
30
31
"(F) X X x;
["(G) To require Investment Promotion Agencies and other 
§0vcrnmcnt agGnciGS-administcring tax incentives to submit, regularly or
when requested, summaries of approved investment and incentives
granted, and firm- or-entity-lcvcl tax incentives and benefits data os input
to the Fiscal Incentives Review Beard's-review-and audit function, and
evaluation of performance of recipionts of tax incentives. For this purpoiXi,
the-Rscal Incentives Review Board shall maintain a masterlist of registered
products and services for export or domestic consumption that are-entitled
to incentives: Provided, That to facilitate compliance with the foregoing,
the Department of Trade and Industry, in coordination with relevant
regulatery-bedies, shall cause-the registration and reporting by registered
business-enterprises of the types of services rendered whether domestically
or to-for-eign-elients; types of products manufactured domestically, products
imported and sold-locally, and products cxportect;]
''[(Fi)] (G) To publish regularly, per firm, the data pertaining to the 
amount of tax incentives, tax payments, and other related information, 
including benefits data, SUBJECT TO THE PROVISIONS OF CHAPTER 
V OF THIS TITLE;
"[^] (H) X X x;
"im (I) X X x;
"[6^] (J) To decide on issues, on its own initiative or upon the 
recommendation of the Investment Promotion Agency, after due hearing, 
concerning the approval, disapproval, cancellation, suspension, withdrawal, 
or forfeiture of tax incentives or tax subsidy in accordance with this Act. 
The Fiscal Incentives Review Board shall decide on the matter within ninety 
(90) days from the date when the Fiscal Incentives Review Board declares 
the issues submitted for resolution. A business enterprise adversely 
affected by the decision of the Fiscal Incentives Review Board may, within 
thirty (30) days from receipt of the adverse decision, appeal the same to 
the Court of Tax Appeals;^
40


1 
(K) To promulgate such rules and regulations as may be
2 
necessary to implement the intent and provisions of this [Section] TITLE.
3 
FOR PURPOSES OF PUBLICATION, THE FISCAL INCENTIVES
4 
REVIEW BOARD MAY MAKE USE OF ANY ELECTRONIC MEANS OF
5 
PUBLICATION IN THE OFFICIAL GAZETTE OR ITS OFFICIAL
6 
WEBSITE;
7 
(L) xxx;
8 
"EWl (M) xxx;
9 
"im 
(N) TO RECOMMEND 
POLICIES 
FOR 
THE
10 
PREVENTION OF FISCAL INCENTIVES AVAILMENT ABUSE AND
11 
TAX EVASION UNDER THIS CODE AND SMUGGLING ACTIVITIES;
12 
AND
13 
"(0) XXX
14 
"xxx."
15 
SEC. 18. Section 300 of the National Internal Revenue Code of 1997, as
16 
amended, is hereby further amended to read as follows:
17 
"SEC. 300. Strategic Investment Priority Plan. - The Board of
18 
Investments, [in coordination] 
IN CONSULTATION with 
the Fiscal
19 
Incentives Review Board, AND THE Investment Promotion Agencies,
20 
other government agencies administering tax incentives, and the private
21 
sector, shall formulate the NATIONAL [StratcgicHInvcstmcnt Priorfty
22 
Plaft] SIPP to be submitted to the President for approval, which may
23 
contain recommendations for types of non-fiscal support needed to create
24 
high-skilled jobs to grow a local pool of enterprises, particularly micro,
25 
small and medium enterprises (MSMEs), that can supply to domestic and
26 
global value chains, to increase the sophistication of products and services
27 
that are produced and/or sourced domestically, to expand domestic
28 
supply and reduce dependence on imports, and to attract significant
29 
foreign capital or investment. EACH INVESTMENT PROMOTION
30 
AGENCY, IN CONSULTATION WITH THE BOARD OF
31 
INVESTMENTS, MAY FORMULATE THEIR OWN SIPP, WHICH
41


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
SHALL BE KNOWN AS THE "LOCAL SIPP". The [Strategic Investment 
Priority Plan] NATIONAL AND LOCAL SIPP shall be valid for a period 
of three (3) years, subject to review and amendment every three (3) years 
thereafter unless there would be a supervening event that would 
necessitate its review^], OR IN EXCEPTIONAL CIRCUMSTANCES, 
TO ATTRACT SUBSTANTIAL INVESTMENT TO RESPOND TO A 
SITUATION OR CRISIS OR TO TARGET SPECIFIC INDUSTRIES: 
PROVIDED, THAT THE BOARD OF INVESTMENTS SHALL CAUSE 
THE PUBLICATION OF THE RULES AND REGULATIONS 
IMPLEMENTING THE NATIONAL AND LOCAL SIPP, INCLUDING 
ANY AMENDMENTS THEREOF, IN THE OFFICIAL GAZETTE OR 
NEWSPAPER OF GENERAL CIRCULATION, AND ON ITS OFFICIAL 
WEBSITE, TO BE EFFECTIVE.
"The NATIONAL AND LOCAL [Strategic Investment Priority Plan] 
SIPP shall contain the following:
"(A) XXX
"(B) xxx; and
"(C) Terms and conditions on the grant of enhanced deductions 
under Section 294(C).
"All sectors or industries that may be included in the NATIONAL 
AND LOCAL [Strategic-Investment Priority Plan] SIPP shall undergo an 
evaluation to determine the suitability and potential of the industry or the 
sector in promoting long-term growth and sustainable development, and 
the national interest. In no case shall a sector or industry be included in the 
[Strategic Investment Priority Plan] SIPP unless it is supported by a formal 
evaluation process or report.
"xxx."
In no case shall the Investment Promotion Agencies accept 
applications unless the project or activity is listed in EITHER the 
NATIONAL OR LOCAL SIPP [Strategic Investment Priority Plan].
42


1 
Projects or activities not listed in the NATIONAL OR LOCAL SIPP
2 
[Strategic--Investment Priority Plan] shall be automatically disapproved.
3 
SEC. 19. Section 301 of the National Internal Revenue Code of 1997, as
4 
amended, is hereby further amended to read as follows:
5 
"SEC. 301. Power of the President to Grant Incentives. -
6 
Notwithstanding the provisions of Sections 295, 296, AND 296-A the
7 
President may, in the interest of national economic development, [aed] OR
8 
upon the recommendation of the Fiscal Incentives Review Board, modify
9 
the mix, period or manner of availment of incentives provided under this
10 
Code OR craft the appropriate [financial] FISCAL AND NON-FISCAL
11 
support package for a highly desirable project or a specific industrial activity
12 
based on defined development strategies for creating high-value jobs,
13 
building new industries to diversify economic activities, and attracting
14 
significant foreign and domestic capital or investment, and the fiscal
15 
requirements of the activity or project, subject to maximum incentive levels
16 
recommended by the Fiscal Incentives Review Board: Provided, That the
17 
grant of [income tax holiday] ITH shall not exceed [eight (8)] TEN (10)
18 
years FOLLOWED BY [special corporate income tax rate] SCIT of five
19 
percent (5%) OR EDR; OR SCIT OR EDR IMMEDIATELY AT THE
20 
START OF COMMERCIAL OPERATIONS may be granted: Provided,
21 
further, That the total period of INCOME TAX-BASED incentive availment
22 
shall not exceed forty (40) years.
23 
"The Fiscal Incentives Review Board shall determine whether the
24 
benefits that the Government may derive from such investment are clear
25 
and convincing and far outweigh the cost of incentives that will be granted
26 
in determining whether a project or activity is highly desirable.
27 
"The [exercise by the] President [of his] MAY EXERCISE THE
28 
powers under this Section: [shall be based on a positive recommendation
29 
from the Fiscal Incentives Review Board,—upon its—determination]
30 
PROVIDED, Thatihe following conditions are satisfied:
43


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25
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28
29
30
"(1) The project has a comprehensive sustainable 
development plan with clear inclusive business approaches, and 
high level of sophistication and innovation; and
"(2) Minimum investment capital of Fifty billion pesos 
(P50,000,000,000.00) or its equivalent in US dollars, or a minimum 
direct local employment generation of at least ten thousand 
(10,000) within three (3) years from the issuance of the certificate 
of entitlement.
"'Provided, That the threshold shall be subject to a periodic review 
by the Fiscal Incentives Review Board every three (3) years, taking into 
consideration international standards or other economic indicators: 
Provided, further, That if the project fails to substantially meet the 
projected impact on the economy and agreed performance targets, the 
Fiscal Incentives Review Board shall recommend to the President the 
cancellation of the tax incentive or FISCAL AND NON-FISCAL [financial] 
support package or the modified period or manner of availment of 
incentives, after due hearing and an adequate opportunity to substantially 
comply with the agreed performance targets and outputs.
"For this purpose, THE PRESIDENT MAY GRANT [financial] 
NON-FISCAL support PACKAGE LIMITED TO THE [includes] utilization 
of government resources such as [land use] USE OF LAND [, water 
appropriation, power provision, ]and budgetary support provision under 
the annual General Appropriations Act.
"This power of the President, in as far as it commands additional 
public sector expenditures in support of investors, is suspended during 
fiscal years when, an [unimaginable] UNMANAGEABLE fiscal deficit is 
declared by the President on the advice of the Development Budget 
Coordination Committee with a consequence that even core budgetary 
obligations, such as, but not limited to, mandatory revenue allotments for 
local government units and budget for the National Economic and
44


1 
Development Authority's core public investments program, cannot be fully
2 
financed.
3 
"Notwithstanding the provisions in the preceding paragraphs, tax
4 
and duty incentives granted through legislative franchises shall be
5 
[excepted] EXEMPTED from the foregoing powers of the President to
6 
review, withdraw, suspend, or cancel tax incentives and subsidies."
7 
SEC. 20. A new Chapter VI under Titie XIII shail be introduced in the
8 
National Internal Revenue Code of 1997, as amended, and the existing Chapter
9 
VI shail be re-sectioned accordingly. The new Chapter VI under Title XIII shall
10 
read as follows:
11 
"CHAPTER VI
12 
"PENALTIES
13 
"SEC. 308. Penalties for Noncompliance with Filing and Reportoriai
14 
Requirements. - Any registered business enterprise or other registered
15 
enterprise, which fails to comply with filing and reportoriai requirements
16 
with the appropriate Investment Promotion Agencies or other government
17 
agencies administering tax incentives and/or, which fails to show proof of
18 
filing of tax returns using the eiectronic system for fiiing and payment of
19 
taxes of the Bureau of Internal Revenue under Section 305 hereof, shaii be
20 
imposed the foliowing penalties by the appropriate Investment Promotion
21 
Agency or other government agency administering tax incentives:
22 
(A) First (1st) Violation - Payment of a fine amounting to One
23 
hundred thousand pesos (P100,000.00);
24 
(B) Second (2nd) Vioiation - Payment of a fine amounting to Five
25 
hundred thousand pesos (P500,000.00); and
26 
(C) Third (3rd) Violation - Cancellation by the Fiscal Incentives
27 
Review Board, OR INVESTMENT PROMOTION AGENCY, AS THE CASE
28 
MAY BE, of the registration of the registered business enterprise or
29 
registered entity with the FISCAL INCENTIVES REVIEW BOARD OR
45


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19
20 
21 
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23
24
25
26
27
28
29
30
31
Investment Promotion Agency or other government agency administering 
tax incentives.
Provided, That if the failure to show such proof is not due to the 
fault of the registered business enterprises or other registered enterprises, 
the same shall not be a ground for the suspension of the Income Tax 
Holiday (UH) and/or other tax incentives availment: Provided, further, That 
collections from the penalties shall accrue to the general fund.
[After due proeess-,- the Fiscal Incentives Review Board or the 
concerned Investment Promotion-AgeneyrQS the case may be, may cancel
the registration, suspend the enjoyment of incentive- benefits of any
registered enterprise, and/or require refund of incentives enjoyed by such
enterpriseH^cluding interests and monetary penaltiesy-fer-any material
misrepresentation of information for the purpose of availing more
incentives than what it is entitled to under this Code.]
Provided, That the Fiscal Incentives Review Board OR 
INVESTMENT PROMOTION AGENCY, AS THE CASE MAY BE, with the 
recommendation of the Commissioner, may revoke or suspend incentives 
granted by an FISCAL INCENTIVES REVIEW BOARD OR Investment 
Promotion Agency, AS THE CASE MAY BE, and/or order a business 
closure of a registered business enterprise that violates Title VI (Excise 
Taxes on Certain Goods) and Title X (Statutory Offenses and Penalties) of 
this Code and other related revenue regulations, orders, or issuances of the 
government: Provided, further, That such authority shall cover the acts of 
the registered business enterprise committed even in the first year of 
availment of incentives. Notwithstanding the provisions of this Section, the 
Department of Finance, the Bureau of Internal Revenue, and the Bureau of 
Customs shall retain their respective mandates, powers and functions as 
provided for under this Act and related laws.
Any government official or employee who fails without justifiable 
reason to provide or furnish the required tax incentives report or other data 
or information as required under Sections 306 and 307 of this Act365 shall
46


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28 
29
be penalized, after due process, by a fine equivalent to the official's or 
employee's basic salary for a period of one (1) month to six (6) months or 
by suspension from government service for not more than one (1) year, or 
both, in addition to any criminal and administrative penalties imposable 
under existing laws.
SEC. 
308-A. ADMINISTRATIVE 
SANCTIONS 
ON
INVESTMENT PROMOTION AGENCIES. - THE FISCAL INCENTIVES 
REVIEW BOARD MAY SUSPEND THE AUTHORITY OF THE 
INVESTMENT PROMOTION AGENCIES TO GRANT AMD 
INCENTIVES FOR ANY WILLFUL VIOLATION OF TITLE XIII OF 
THIS CODE, SUCH AS:
(A) 
GRANT 
OF INCENTIVES TO 
PROJECTS 
OR
ACTIVITIES NOT LISTED IN THE NATIONAL OR LOCAL SIPP OR 
NOT COMPLIANT WITH QUALIFICATION REQUIREMENTS AS 
PROVIDED IN THE SIPP;
(B) 
GRANT 
OF INCENTIVES TO 
PROJECTS 
OR
ACTIVITIES 
WHOSE INVESTMENT CAPITAL IS BEYOND THE
PRESCRIBED THRESHOLD UNDER SECTION 297(B) OF THIS 
CODE;
(C) 
UNJUSTIFIED REFUSAL TO PERMIT EXAMINATION 
OR CONDUCT OF PERFORMANCE REVIEW TO DETERMINE THE 
COMPLIANCE OF THE INVESTMENT PROMOTION AGENCIES WITH 
THE PROVISIONS OF TITLE XIII OF THIS CODE;
(D) 
UNJUSTIFIED REFUSAL TO PERMIT EXAMINATION 
OR CONDUCT OF VERIFICATION OF COMPLIANCE WITH THE 
PERFORMANCE COMMITMENT OF REGISTERED BUSINESS 
ENTERPRISES;
(E) 
SUBMISSION OF FALSE OR MISLEADING 
INFORMATION, STATEMENT OR REPORT, AND ANY UNJUSTIFIED
47


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3
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10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
NON-SUBMISSION THEREOF TO THE FISCAL INCENTIVES 
REVIEW BOARD; OR
(F) FAILURE OR REFUSAL TO COMPLY WITH, OR 
VIOLATION OF, ANY POLICY OR ANY ORDER, INSTRUCTION, OR 
REGULATION ISSUED BY THE FISCAL INCENTIVES REVIEW 
BOARD.
LIABILITY FOR ANY OF THE FOREGOING OFFENSES SHALL 
BE WITHOUT PREJUDICE TO THE FILING OF APPROPRIATE 
CRIMINAL AND ADMINISTRATIVE CASES AGAINST ERRING 
OFFICIALS AND EMPLOYEES UNDER EXISTING LAWS.
IN CASE OF SUSPENSION OF THE AUTHORITY TO GRANT 
INCENTIVES, ALL PENDING APPLICATIONS FOR TAX INCENTIVES 
WITH THE INVESTMENT PROMOTION AGENCY, REGARDLESS OF 
THE INVESTMENT CAPITAL, SHALL BE ELEVATED TO THE FISCAL 
INCENTIVES REVIEW BOARD FOR APPROPRIATE ACTION: 
PROVIDED, THAT THE PERIOD OF SUSPENSION OF SUCH 
AUTHORITY SHALL NOT EXCEED SIX (6) MONTHS FROM THE DATE 
OF THE DECISION OF THE FISCAL INCENTIVES REVIEW BOARD.
SEC. 308-B. ADMINISTRATIVE SANCTIONS ON 
REGISTERED BUSINESS ENTERPRISES. -THE FISCAL INCENTIVES 
REVIEW BOARD OR THE CONCERNED INVESTMENT PROMOTION 
AGENCY, AS THE CASE MAY BE, MAY IMPOSE FINES OF NOT LESS 
THAN ONE HUNDRED THOUSAND PESOS (P100,000.00) BUT NOT 
MORE THAN TWO MILLION PESOS (P2,000,000) FOR EVERY 
VIOLATION UNDER THIS SECTION, AND SUSPEND OR 
WITHDRAW THE TAX INCENTIVES GRANTED BY THE FISCAL 
INCENTIVES REVIEW BOARD OR THE INVESTMENT PROMOTION 
AGENCY, AS THE CASE MAY BE, OR CANCEL THE CERTIFICATE OF 
REGISTRATION, FOR ANY WILLFUL VIOLATION OF TITLE XIII OF 
THIS CODE, SUCH AS:
48


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20 
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26
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28
29
30
(A) 
NON-COMPLIANCE WITH THE AGREED 
PERFORMANCE COMMITMENTS OR VIOLATION OF ANY OF THE 
TERMS AND CONDITIONS IMPOSED IN THE GRANT OF TAX 
INCENTIVES BY THE FISCAL INCENTIVES REVIEW BOARD OR THE 
INVESTMENT PROMOTION AGENCY;
(B) 
MATERIAL MISREPRESENTATION, OR SUBMISSION 
OF FALSIFIED OR MISLEADING INFORMATION OR DOCUMENTS 
SUBMITTED BY THE REGISTERED BUSINESS ENTERPRISE TO THE 
FISCAL INCENTIVES REVIEW BOARD OR THE CONCERNED 
INVESTMENT PROMOTION AGENCY;
(C) 
UNJUSTIFIED REFUSAL TO PROVIDE THE 
NECESSARY DOCUMENTS DURING THE CONDUCT OF ONSITE 
VISITS, INSPECTIONS, CHECKS, OR INVENTORY COUNT FOR THE 
VERIFICATION AND RECONCILIATION OF THE RECORDS; OR
(D) 
FAILURE OR REFUSAL TO COMPLY WITH, OR 
VIOLATION OF, ANY POLICY, ORDER, INSTRUCTION, OR 
REGULATION ISSUED BY THE FISCAL INCENTIVES REVIEW 
BOARD.
ANY OTHER VIOLATION OF THE PROVISIONS OF TITLE 
XIII OF THIS CODE MAY WARRANT THE IMPOSITION OF A FINE 
RANGING FROM FIVE THOUSAND PESOS (P5,000) TO TWO 
MILLION PESOS (P2,000,000), AND NOT MORE THAN ONE 
THOUSAND PESOS (P1,000) FOR EACH DAY OF CONTINUING 
VIOLATION, BUT IN NO CASE TO EXCEED TWO MILLION PESOS 
(P2,000,000): PROVIDED, THAT THE FINES IMPOSED SHALL 
ACCRUE TO THE GENERAL FUND.
LIABILITY FOR ANY OF THE FOREGOING OFFENSES SHALL 
BE WITHOUT PREJUDICE TO THE IMPOSITION OF ANY OTHER 
ADMINISTRATIVE, CIVIL, OR CRIMINAL LIABILITY UNDER 
EXISTING LAWS.
49


1 
IN CASE OF A SUSPENSION OR WITHDRAWAL ORDER
2 
WHICH HAS BECOME FINAL AND EXECUTORY, THE FISCAL
3 
INCENTIVES REVIEW BOARD OR THE INVESTMENT PROMOTION
4 
AGENCY, AS THE CASE MAY BE, SHALL ENDORSE TO THE BUREAU
5 
OF INTERNAL REVENUE AND BUREAU OF CUSTOMS, AS MAY BE
6 
APPLICABLE, SUCH ORDER FOR THE ASSESSMENT OF THE
7 
APPROPRIATE AMOUNT OF DEFICIENCY TAXES AND DUTIES,
8 
INCLUDING INTEREST AND MONETARY PENALTIES, THAT NEED
9 
TO BE PAID BY THE REGISTERED BUSINESS ENTERPRISE WHOSE
10 
INCENTIVES HAVE BEEN SUSPENDED OR WITHDRAWN,
11 
RECKONED FROM THE FIRST DAY OF THE TAXABLE PERIOD IN
12 
WHICH THE REGISTERED BUSINESS ENTERPRISE COMMITTED
13 
THE VIOLATION.
14 
IN CASE OF CANCELLATION OF CERTIFICATE OF
15 
REGISTRATION, THE PROJECT OR ACTIVITY OF THE REGISTERED
16 
BUSINESS ENTERPRISE SHALL CEASE TO BE REGISTERED AND
17 
SHALL BE REQUIRED TO PAY ALL APPROPRIATE TAXES AND
18 
DUTIES FROM THE TIME THE CANCELLATION ORDER HAS
19 
BECOME FINAL AND EXECUTORY.
20 
SEC. 21. Section 309 of the National Internal Revenue Code of 1997, as
21 
amended, is hereby further amended to read as follows;
22 
"SEC. 309. Prohibition on Registered Activities. - EXCEPT AS
23 
ALLOWED UNDER THIS PROVISION, [A] a qualified registered
24 
project or activity under an Investment Promotion Agency administering
25 
an economic zone or freeport shall be exclusively conducted or operated
26 
within the geographical boundaries of the zone or freeport being
27 
administered by the Investment Promotion Agency in which the project
28 
or activity is registered, OR WITHIN THE REGISTERED PLACE OF
29 
BUSINESS OF THE QUALIFIED PROJECT OR ACTIVITY FOR
30 
THOSE LOCATED OUTSIDE ECONOMIC ZONES OR FREEPORTS:
31 
Provided, That a registered business enterprise may conduct or operate
50


1 
more than one qualified registered project or activity within the same zone
2 
or freeport under the same Investment Promotion Agency: Provided,
3 
further, That any project or activity conducted or performed outside the
4 
geographical boundaries of the zone or freeport shall not be entitled to
5 
the incentives provided in this Act[7 unless such project or activity is
6 
eendueted or operated under another Invcstment-Pfemotion-Agency]:
7 
PROVIDED, FURTHERMORE, THAT REGISTERED BUSINESS
8 
ENTERPRISES 
MAY BE ALLOWED 
TO INSTITUTE A
9 
"TELECOMMUTING" PROGRAM AS DEFINED UNDER REPUBLIC
10 
ACT NO. 11165, OTHERWISE KNOWN AS "THE TELECOMMUTING
11 
ACT," INCLUDING WORK-FROM-HOME ARRANGEMENTS, WHICH
12 
SHALL NOT COVER MORE THAN FIFTY PERCENT (50%) OF THE
13 
TOTAL WORKFORCE, SUBJECT TO THE RULES AND
14 
REGULATIONS WHICH SHALL BE FORMULATED BY THE
15 
INVESTMENT PROMOTION AGENCIES, AND SHALL, IN DOING
16 
SO, CONTINUE TO AVAIL OF ALL THE INCENTIVES PROVIDED
17 
UNDER THIS 
ACT 
AND UNDER 
THEIR RESPECTIVE
18 
REGISTRATION WITH ANY APPLICABLE INVESTMENT
19 
PROMOTION AGENCY: PROVIDED, FINALLY, THAT DOUBLE
20 
REGISTRATION 
FOR PURPOSES OF 
AVAILING OTHER
21 
INCENTIVES UNDER SPECIAL LAWS SHALL NOT BE ALLOWED."
22 
SEC. 22. Section 310 of the National Internal Revenue Code of 1997, as
23 
amended, is hereby further amended to read as follows:
24 
"SEC. 310. Establishment of One-Stop Action Center AND INITIAL
25 
POINT OF CONTACT FOR FOREIGN INVESTMENT LEADS. - All
26 
Investment Promotion Agencies shall establish a one-stop shop or one-
27 
stop action center that will facilitate and expedite, to the extent possible,
28 
the setting up and conduct of registered projects or activities, including
29 
assistance in coordinating with the local government units and other
30 
government agencies to comply with Republic Act No. 11032, otherwise
31 
known as the Ease of Doing Business and Efficient Government Service
32 
Delivery Act of 2018: Provided, however. That the enterprises shall
51


1 
continue to avail of the one-stop shop facility notwithstanding the
2 
expiration of their incentives under this Code.
3 
"UNLESS OTHERWISE PROVIDED UNDER SPECIAL LAWS,
4 
LOCAL GOVERNMENT UNITS MAY AGREE WITH INVESTMENT
5 
PROMOTION AGENCIES, THROUGH APPROPRIATE MEMORANDA
6 
OF AGREEMENT, THAT THE INVESTMENT PROMOTION AGENCIES
7 
BE DELEGATED WITH THE FUNCTIONS OF ACCEPTING,
8 
PROCESSING, AND GRANTING BUSINESS PERMITS AND
9 
LICENSES.
10 
"INVESTMENT PROMOTION AGENCIES MAY ALSO ASSIST
11 
REGISTERED BUSINESS ENTERPRISES IN OBTAINING LICENSES
12 
AND PERMITS FROM NATIONAL GOVERNMENT AGENCIES BY
13 
ACCEPTING DOCUMENTARY REQUIREMENTS FOR SUCH
14 
LICENSES AND PERMITS, AND SUBMITTING THE SAME ON
15 
BEHALF OF REGISTERED BUSINESS ENTERPRISES TO THE
16 
APPROPRIATE NATIONAL GOVERNMENT AGENCIES;
17 
"INVESTMENT PROMOTION AGENCIES MAY UNDERTAKE
18 
SUCH ACTIVITIES THAT ARE NECESSARY TO PERFORM THE
19 
FUNCTION OF THE INITIAL POINT OF CONTACT FOR FOREIGN
20 
INVESTMENT LEADS. SUCH ACTIVITIES SHALL INCLUDE
21 
ASSISTING POTENTIAL FOREIGN INVESTORS ESTABLISH THEIR
22 
BUSINESS ENTERPRISES IN THE INVESTMENT PROMOTION
23 
AGENCY OR IN THE ECONOMIC ZONE MOST SUITED TO THEIR
24 
SPECIFIC NEEDS."
25 
SEC. 23. Section 311 of the National Internal Revenue Code of 1997, as
26 
amended, is hereby further amended to read as follows:
27 
"'SEC. 311. Investments Prior to the Effectivity of [this Aet]
28 
REPUBLIC ACT NO. 11534. - Registered business enterprises with
29 
incentives granted prior to the effectivity of [this Act] REPUBLIC ACT NO.
30 
11534 shall be subject to the following rules:
31 
"(A) xxx;
52


1 
"(B) Registered business enterprises, whose projects or activities
2 
were granted an [income tax holiday] ITH prior to the effectivity of this
3 
Act and that are entitled to the five percent (5%) tax on gross income
4 
earned incentive after the [Income tax holiday] ITH, shall be allowed to
5 
avail of the five percent (5%) tax on gross income earned incentive based
6 
on Subsection (C), INCLUDING ALL CORRESPONDING EXEMPTIONS
7 
FROM NATIONAL TAXES AND LOCAL TAXES, FEES, AND CHARGES
8 
UNTIL DECEMBER 31, 2034; [an^]
9 
"(C) Registered business enterprises currently availing of the five
10 
percent (5%) tax on gross income earned granted prior to the effectivity of
11 
this Act shall be allowed to continue availing the said tax incentive at the
12 
rate of five percent (5%), INCLUDING ALL CORRESPONDING
13 
EXEMPTIONS FROM NATIONAL TAXES AND LOCAL TAXES, FEES
14 
AND CHARGES [for ten (10) years] UNTIL DECEMBER 31, 2034[.];
15 
AND
16 
"(D) REGISTERED BUSINESS ENTERPRISES CURRENTLY
17 
AVAILING DUTY EXEMPTION ON IMPORTATION UNDER SECTION
18 
294 (D) AND VALUE-ADDED TAX (VAT) EXEMPTION ON
19 
IMPORTATION AND VAT ZERO-RATING ON LOCAL PURCHASES
20 
UNDER SECTION 294 (E) PRIOR TO THE EFFECTIVITY OF THIS
21 
ACT SHALL BE ALLOWED TO CONTINUE AVAILING THE SAID TAX
22 
INCENTIVES UNTIL DECEMBER 31, 2034.
23 
SEC. 24. Appropriations. - The Secretary of Finance shall immediately include
24 
in the Department's program the operationalization of the electronic processing of the
25 
VAT refund system, the funding of which shall be included in the annual General
26 
Appropriations Act.
27 
SEC. 25. Transitory Provisions. - The following provisions shall apply
28 
prospectively to projects or activities granted with tax incentives under Republic Act
29 
No. 11534 upon the effectivity of this Act:
53


1 
(1) 
TTie exemption from national and local taxes, including local fees
2 
and charges for projects or activities availing SCIT pursuant to Section 294(B) of
3 
Title XIII;
4 
(2) 
The availment of additional enhanced deductions provided under
5 
Section 294(C)(6), (7), (8), and (9) of Title XIII;
6 
(3) 
The imposition of the two percent (2%) registered business
7 
enterprises local tax under Section 294(F) of Title XIII, to registered business
8 
enterprises availing of TTH or EDR; and
9 
(4) The conditions for the availment of the duty and VAT exemption
10 
on importation and VAT zero-rating on local purchases under Sections 295(D)
11 
and (E) of Title XIII.
12 
No tax refund or credit shall be granted to registered business enterprises
13 
covered by Sections 19 of this Act.
14 
SEC. 26. Implementing Rules and Regulations. - Within ninety (90) days from
15 
the effectivity of this Act, the Secretary of Finance, upon the recommendation of the
16 
Commissioner of Internal Revenue, shall promulgate the necessary rules and
17 
regulations for its effective implementation: Provided, l\\dX. for the provisions under
18 
Title XIII of the National Internal Revenue Code of 1997, as amended, the Secretary
19 
of Finance and the Secretary of Trade and Industry shall jointly promulgate the
20 
necessary rules and regulations thereof within the same period, after due
21 
consultations with the [Cemmissioncr] BUREAU of Internal Revenue, BUREAU OF
22 
CUSTOMS, the Board of Investments, and other Investment Promotion Agencies, for
23 
ITS effective implementation. Failure to promulgate the rules and regulations shall
24 
not prevent the implementation of this Act upon its effectivity.
25 
SEC. 27. Separability Clause. - If any provision of this Act is declared
26 
unconstitutional, the remaining parts or provisions hereof not affected thereby shall
27 
remain in full force and effect.
28 
SEC. 28. Repealing Clause. -
29 
(A) The provisions of the following laws expressly constituting an ecozone or
30 
freeport zone as separate customs territory for VAT and duty incentives purposes are
31 
hereby repealed:
54


1 
1. Section 8 of Republic Act No. 7916, entitled "An Act Providing for the
2 
Legal Framework and Mechanisms for the Creation, Operation, Administration,
3 
and Coordination of Special Economic Zones in the Philippines, Creating for the
4 
Purpose the Philippine Economic Zone Authority (PEZA), and for Other
5 
Purposes" as amended by Republic Act No. 8748";
6 
2. Sections 12(b), 15 paragraph 2, and 15-A paragraph 1 of Republic Act
7 
No. 7227, entitled "An Act Accelerating the Conversion of Military Reservations
8 
into Other Productive Uses, Creating the Bases Conversion and Development
9 
Authority for the Purpose, Providing Funds Therefor and for Other Purposes",
10 
as amended by Republic Act No. 9400;
11 
3. Section 4 (d) of Republic Act No. 7903, entitled "An Act Creating
12 
Special Economic Zone and Freeport in the City of Zamboanga and Establishing
13 
for this Purpose the Zamboanga City Special Economic Zone Authority,
14 
Appropriating Funds Therefor, and for Other Purposes";
15 
4. Section 4 (e) of Republic Act No. 9728, entitled "An Act Converting
16 
the Bataan Economic Zone located in the Municipality of Mariveles, Province of
17 
Bataan, into the Freeport Area of Bataan, Creating for this Purpose the
18 
Authority of the Freeport Area of Bataan (AFAB), Appropriating Funds Therefor
19 
and for Other Purposes";
20 
5. Section 8 of Republic Act No. 11999 paragraph 1, entitled "Bulacan
21 
Special Economic Zone and Freeport Act"; and
22 
(B) The provisions of the following laws insofar as it classifies projects into
23 
pioneer and non-pioneer for purposes of incentives, are hereby repealed;
24 
1. Section 133(g) of Republic Act No. 7160, entitled "The Local
25 
Government Code of 1991", as amended; and
26 
2. Article 16, 17, 18, and 37(c) of Executive Order No. 226 entitled
27 
"Omnibus Investments Code of 1987, as amended.
28 
(C) Section 815 of Republic Act No. 10863 entitled "Customs Modernization and
29 
Tariff Act" insofar as it grants exemption from duty and tax on goods in free zones.
30 
All law, decrees, executive orders, implementing rules and regulations,
31 
issuances, or any part thereof inconsistent with the provisions of this Act are deemed
32 
repealed, amended or modified accordingly.
55


1 
SEC. 29. Amendatory clause. - The provisions of the following laws are hereby
2 
amended insofar as they are inconsistent with the provisions of this Act:
3 
1. Section 4(d) of Republic Act No. 7916, entitled "An Act Providing for
4 
the Legal Framework and Mechanisms for the Creation, Operation,
5 
Administration, and Coordination of Special Economic Zones in the Philippines,
6 
Creating for the Purpose the Philippine Economic Zone Authority (PEZA), and
7 
for Other Purposes" as amended by Republic Act No. 8748";
8 
2. Sections 15-B and 15-C of Republic Act No. 7227, entitled "An Act
9 
Accelerating the Conversion of Military Reservations into Other Productive Uses,
10 
Creating the Bases Conversion and Development Authority for the Purpose,
11 
Providing Funds Therefor and for Other Purposes", as amended by Republic Act
12 
No. 9400;
13 
3. Section 3 of Republic Act No. 7922, entitled "An Act Establishing a
14 
Special Economic Zone and Free Port in the Municipality of Santa Ana and the
15 
Neighboring Islands of Cagayan, Providing Funds Therefor, and for Other
16 
Purposes";
17 
4. Section 3 of Presidential Decree No. 538, entitled "Creating and
18 
Establishing the PFIIVIDEC Industrial Authority and Making it a Subsidiary
19 
Agency of the Philippine Veterans Development Corporation, defining its
20 
Powers, Functions and Responsibilities, and for Other Purposes" as amended
21 
by Presidential Decree No. 
1491;
22 
5. Section 3 of Republic Act No. 9490, entitled "An Act Establishing the
23 
Aurora Special Economic Zone in the Province of Aurora, Creating for the
24 
Purpose the Aurora Special Economic Zone Authority, Appropriating Funds
25 
Therefor and for Other Purposes"; and
26 
6. Section 28, Art. XIII of Republic Act No. 11054, entitled "Organic Law
27 
for the Bangsamoro Autonomous Region in Muslim Mindanao".
28 
SEC. 30. Effectivity. - This Act shall take effect after fifteen (15) days from its
29 
publication in the Official Gazette or in a newspaper of general circulation.
Approved,
56