EIGHTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
^
 
S e n a te
^^s©fT;cf of tl)r &«rrtnrj>
20 FEB 17 P5 -42
s. No.
S E N A T E
1357
RECE.; DP'
(In Substitution of S.B. Nos. 535, 595, and 702 taking into consideration
H.B. No. 4157)
Prepared by the Committee on Ways and Means with Senators Zubiri, Recto,
Angara, and Cayetano as authors
AN ACT REFORMING THE CORPORATE INCOME TAX AND INCENTIVES 
SYSTEM, AMENDING FOR THE PURPOSE SECTIONS 4, 20, 27, 28, 34 AND 290 
OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND 
CREATING THEREIN NEW TITLE XIII, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
SECTION 1. Short Title. -  This Act shall be known as the “Corporate Income
2 
Tax and Incentives Reform  A ct” or “C ITIR A.”
3 
SEC. 2. Declaration of Policy. -  It is hereby declared the policy of the State to
4 
develop the national econom y tow ards global com petitiveness by im plem enting tax
5 
policies instrum ental in attracting investm ents, which will result in productivity
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enhancem ent, em ploym ent generation, countrywide developm ent, and a more
7 
inclusive econom ic growth, while at the sam e tim e m aintaining fiscal prudence and
8 
stability.
9 
To achieve these objectives, the State shall:
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(a) Im prove the equity and efficiency of the corporate tax system  by lowering
11 
the rate, w idening the tax base, and reducing tax distortions and leakages; and
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(b) Develop a more responsive and globally-com petitive tax incentives regim e
13 
that is perform ance-based, targeted, tim e-bound, and transparent.
14 
SEC. 3. Section 4 of the National Internal Revenue Code of 1997,
15 
amended, is hereby further am ended to read as follows:
16 
“SEC. 4. Power of the Commissioner to Interpret Tax Laws and
17 
to Decide Tax Cases. -  The pow er to interpret the provisions of the
18 
Code and other tax laws shall be under the exclusive and original
as


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jurisdiction of the Commissioner, subject to review by the Secretary of 
Finance: PROVIDED, THAT THE POWER TO INTERPRET THE 
PROVISIONS OF TITLE XIII OF THE CODE ON TAX INCENTIVES 
SHALL BE THE EXCLUSIVE AND ORIGINAL JURISDICTION OF 
THE SECRETARY OF FINANCE, SUBJECT TO THE EXCLUSIVE 
APPELLATE JURISDICTION OF THE COURT OF TAX APPEALS.
"The power to decide disputed assessments, refunds of internal 
revenue taxes, fees or other charges, penalties imposed in relation 
thereto, or other matters arising under this Code or other laws or 
portions thereof administered by the Bureau of Internal Revenue is 
vested in the Commissioner, subject to the exclusive appellate 
jurisdiction of the Court of Tax Appeals.”
SEC. 4. Section 20 of the National Internal Revenue Code of 1997, as 
amended, is hereby further amended to read as follows:
“SEC. 20. Submission of Report and Pertinent Information by 
the Commissioner. -  
“(A) 
XXX
“(B) 
SUBMISSION OF TAX-RELATED INFORMATION TO 
THE 
DEPARTMENT 
OF 
FINANCE. -  THE COMMISSIONER 
SHALL, UPON THE ORDER OF THE SECRETARY OF FINANCE 
SPECIFICALLY IDENTIFYING THE NEEDED INFORMATION AND 
JUSTIFICATION FOR SUCH ORDER, FURNISH THE SECRETARY 
PERTINENT TAXPAYER INFORMATION: PROVIDED, HOWEVER,
THAT 
THE 
SECRETARY 
AND 
THE 
RELEVANT 
OFFICERS 
HANDLING SUCH SPECIFIC INFORMATION SHALL BE COVERED 
BY THE PROVISIONS OF SECTION 270 UNLESS THE TAXPAYER 
CONSENTS IN WRITING TO SUCH DISCLOSURE.
“ [(B)] (C) Report to Oversight Committee. -  The Commissioner 
shall, with reference to Section 204 of this Code, submit to the 
Oversight Committee referred to in Section 290 hereof, through the 
[Chairmen] CHAIRPERSONS of the Committees on Ways and Means 
of the Senate and House of Representatives, a report on the exercise 
of his powers pursuant to the said Section, every six (6) months of 
each calendar year.”
SEC. 5. 
Section 27 of the National Internal Revenue Code of 1997, as 
amended, is hereby further amended to read as follows:
“SEC. 27. Rates of Income Tax on Domestic Corporations. -  
“(A) In General. -  Except as otherwise provided in this Code,
[an income tax of thirty-five percent (35%)] AN INCOME TAX RATE 
OF TWENTY-NINE PERCENT (29%) EFFECTIVE JANUARY 1, 2020, 
is hereby imposed upon the taxable income derived during each 
taxable year from all sources within and without the Philippines by 
every corporation, as defined in Section 22(B) of this Code and taxable 
under this Title as a corporation, organized in, or existing under the


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laws of the Philippines: [Provided, That effective January 1, 2009, the 
rate of income tax shall be thirty percent (30%).] PROVIDED, THAT 
THE RATE OF CORPORATE INCOME TAX SHALL BE TWENTY- 
EIGHT PERCENT (28%) BEGINNING JANUARY 1, 2021; TWENTY- 
SEVEN PERCENT (27%) BEGINNING JANUARY 1, 2022; TWENTY- 
SIX PERCENT (26%) BEGINNING JANUARY 1, 2023; TWENTY- 
FIVE PERCENT (25%) BEGINNING JANUARY 1, 2024; TWENTY- 
FOUR PERCENT (24%) BEGINNING JANUARY 1, 2025: TWENTY- 
THREE PERCENT (23%) BEGINNING JANUARY 1, 2026; TWENTY- 
TWO PERCENT (22%) BEGINNING JANUARY 1, 2027; TWENTY- 
ONE PERCENT (21%) BEGINNING JANUARY 1, 2028; AND 
TWENTY 
PERCENT 
(20%) 
BEGINNING 
JANUARY 
1, 
2029: 
PROVIDED, FURTHER, THAT THE SCHEDULED DECREASE IN 
THE RATE BEGINNING 2025 MAY BE SUSPENDED BY THE 
PRESIDENT UPON RECOMMENDATION OF THE SECRETARY OF 
FINANCE IF THE PROJECTED DEFICIT TARGET AS A PERCENT 
OF 
GROSS 
DOMESTIC 
PRODUCT 
(GDP) 
EXCEEDS 
THE 
PROGRAMMED 
DEFICIT, 
AS 
DETERMINED 
BY 
THE 
DEVELOPMENT BUDGET COORDINATION COMMITTEE (DBCC) 
IN 
THE 
PRECEDING 
YEAR 
PRIOR 
TO 
THE 
SCHEDULED 
REDUCTION IN THE CORPORATE INCOME TAX RATE, BASED 
ON THE ANNUAL REVIEW OF THE MEDIUM TERM FISCAL 
PROGRAM.
"In the case of corporations adopting the fiscal-year accounting 
period, the taxable income shall be computed without regard to the 
specific date when specific sales, purchases and other transactions 
occur. Their income and expenses for the fiscal year shall be deemed 
to have been earned and spent equally for each month of the period.
“The corporate income tax rate shall be applied on the amount 
computed by multiplying the number of months covered by the new 
rate within the fiscal year by the taxable income of the corporation for 
the period, divided by twelve.
[“ Provided, 
further, 
That 
the 
President, 
upon 
the 
recommendation of the Secretary of Finance, may, effective January 1, 
2000, allow corporations the option to be taxed at fifteen percent (15%) 
of gross income as defined herein, after the following conditions have 
been satisfied;
“(1) A tax effort ratio of twenty percent (20%) of Gross National 
Product (GNP);
“(2) A ratio of forty percent (40%) of income tax collection to 
total tax revenues;
“(3) A VAT tax effort of four percent (4%) of GNP; and
“(4) A 0.9 percent (0.9%) ratio of the Consolidated Public Sector 
Financial Position (CPSFP) to GNP.


1 
“The option to be taxed based on gross income shall be
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available only to firms whose ratio of cost of sales to gross sales or
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receipts from all sources does not exceed fifty-five percent (55%).
4 
“The election of the gross income tax option by the corporation
5 
shall be irrevocable for three (3) consecutive taxable years during
6 
which the corporation is qualified under the scheme.
7 
“For purposes of this Section, the term 'gross income' derived
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from business shall be equivalent to gross sales less sales returns,
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discounts and allowances and cost of goods sold. 'Cost of goods sold’
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shall include all business expenses directly incurred to produce the
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merchandise to bring them to their present location and use.
12 
“For a trading or merchandising concern, ‘cost of goods sold’
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shall include the invoice cost of the goods sold, plus import duties,
14 
freight in transporting the goods to the place where the goods are
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actually sold, including insurance while the goods are in transit.
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“For a manufacturing concern, 'cost of goods manufactured and
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sold’ shall include all costs of production of finished goods, such as
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raw materials used, direct labor and manufacturing overhead, freight
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cost, insurance premiums and other costs incurred to bring the raw
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materials to the factory or warehouse.
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“In the case of taxpayers engaged in the sale of service, ‘gross
22 
income’ means gross receipts less sales returns, allowances and
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discounts.]
24 
“(B) XXX.
25 
“(C) XXX
26 
“(D) XXX
27 
“(E) XXX.”
28 
SEC. 6. Section 28 of the National Internal Revenue Code of 1997,
29 
amended, is hereby further amended to read as follows:
30 
“SEC. 28. Rates of Income Tax on Foreign Corporations. -
31 
“(A) Tax on Resident Foreign Corporations. -
32 
“(1) In General. -  Except as otherwise provided in this Code, a
33 
corporation organized, authorized, or existing under the laws of any
34 
foreign country, engaged in trade or business within the Philippines,
35 
shall be subject to an income tax equivalent to [thirty-five percent
36 
(35%)] TWENTY-NINE PERCENT (29%) of the taxable income
37 
derived in the preceding taxable year from all sources within the
38 
Philippines EFFECTIVE JANUARY 1, 2020: [Provided. That effective
39 
January 1, 2009, the rate of income tax shall be thirty percent (30%).]
40 
PROVIDED, THAT THE RATE OF CORPORATE INCOME TAX
41 
SHALL 
BE 
TWENTY-EIGHT 
PERCENT 
(28%) 
BEGINNING
42 
JANUARY 1, 2021; TWENTY-SEVEN PERCENT (27%) BEGINNING
43 
JANUARY 1, 2022; TWENTY-SIX PERCENT (26%) BEGINNING
44 
JANUARY 1, 2023; TWENTY-FIVE PERCENT (25%) BEGINNING
as


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JANUARY 1, 2024; TWENTY-FOUR PERCENT (24%) BEGINNING 
JANUARY 1, 2025: TWENTY-THREE PERCENT (23%) BEGINNING 
JANUARY 1, 2026; TWENTY-TWO PERCENT (22%) BEGINNING 
JANUARY 1, 2027; TWENTY-ONE PERCENT (21%) BEGINNING 
JANUARY 1, 2028; AND TWENTY PERCENT (20%) BEGINNING 
JANUARY 
1, 
2029: 
PROVIDED, 
FURTHER, 
THAT 
THE
SCHEDULED DECREASE IN THE RATE BEGINNING 2025 MAY BE 
SUSPENDED BY THE PRESIDENT UPON RECOMMENDATION OF 
THE SECRETARY OF FINANCE IF THE PROJECTED DEFICIT 
TARGET AS A PERCENT OF GROSS DOMESTIC PRODUCT (GDP) 
EXCEEDS THE PROGRAMMED DEFICIT, AS DETERMINED BY 
THE 
DEVELOPMENT BUDGET COORDINATION 
COMMITTEE 
(DBCC) IN THE PRECEDING YEAR PRIOR TO THE SCHEDULED 
REDUCTION IN THE CORPORATE INCOME TAX RATE, BASED 
ON THE ANNUAL REVIEW OF THE MEDIUM TERM FISCAL 
PROGRAM.
“In the case of corporations adopting the fiscal-year accounting 
period, the taxable income shall be computed without regard to the 
specific date when sales, purchases and other transactions occur. 
Their income and expenses for the fiscal year shall be deemed to have 
been earned and spent equally for each month of the period.
“The corporate income tax rate shall be applied on the amount 
computed by multiplying the number of months covered by the new 
rate within the fiscal year by the taxable income of the corporation for 
the period, divided by twelve.
[“ Provided, however. That a resident foreign corporation shall 
be granted the option to be taxed at fifteen percent (15%) on gross 
income under the same conditions, as provided in Section 27(A).]
“(2) 
XXX
“(3) 
XXX
[“ (4) Offshore Banking Units. -  The provisions of any law to the 
contrary notwithstanding, income derived by offshore banking units 
authorized by the Bangko Sentral ng Pilipinas (BSP), from foreign 
currency transactions with nonresidents, other offshore banking units, 
local commercial banks, including branches of foreign banks that may 
be authorized by the Bangko Sentral ng Pilipinas (BSP) to transact 
business with offshore banking units shall be exempt from all taxes 
except net income from such transactions as may be specified by the 
Secretary of Finance, upon recommendation of the Monetary Board 
which shall be subject to the regular income tax payable by banks: 
Provided, however, That any interest income derived from foreign 
currency loans granted to residents other than offshore banking units 
or local commercial banks, including local branches of foreign banks 
that may be authorized by the BSP to transact business with offshore


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banking units, shall be subject only to a final tax at the rate of ten 
percent (10%).
“Any 
income 
of 
nonresidents, 
whether 
individuals 
or 
corporations, from transactions with said offshore banking units shall 
be exempt from income tax.]
[“(5)] (4) Tax on Branch Profits Remittances. -  Any profit 
remitted by a branch to its head office shall be subject to a tax of 
fifteen percent (15%) which shall be based on the total profits applied 
or earmarked for remittance without any deduction for the tax 
component thereof [(except those activities which are registered with 
the Philippine Economic Zone Authority).] The tax shall be collected 
and paid in the same manner as provided in Sections 57 and 58 of this 
Code: Provided, that interests, dividends, rents, royalties, including 
remuneration for technical services, salaries, wages premiums, 
annuities, emoluments or other fixed or determinable annual, periodic 
or casual gains, profits, income and capital gains received by a foreign 
corporation during each taxable year from all sources within the 
Philippines shall not be treated as branch profits unless the same are 
effectively connected with the conduct of its trade or business in the 
Philippines.
“ [(6)] (5) Regional or Area Headquarters and Regional 
Operating Headquarters of Multinational Companies. -
“(a) Regional or area headquarters as defined in Section 22(DD) 
shall not be subject to income tax.
“(b) Regional operating headquarters as defined in Section 
22(EE) shall pay a tax of ten percent (10%) of their taxable income[.]:
‘PROVIDED, THAT AFTER TWO (2) YEARS FROM THE 
EFFECTIVITY 
OF 
THIS 
ACT, 
REGIONAL 
OPERATING 
HEADQUARTERS SHALL BE SUBJECT TO THE REGULAR 
CORPORATE INCOME TAX.
“[(7)] (6) Tax on Certain Incomes Received by a Resident 
Foreign Corporation. -
“(a) Interest from Deposits and Yield or any other Monetary 
Benefit 
from 
Deposit 
Substitutes, 
Trust 
Funds 
and 
Similar 
Arrangements and Royalties. -  Interest from any currency bank 
deposit and yield or any other monetary benefit from deposit 
substitutes and from trust funds and similar arrangements and royalties 
derived from sources within the Philippines shall be subject to a final 
income tax at the rate of twenty percent (20%) of such interest; 
Provided, however. That interest income derived by a resident foreign 
corporation from a depository bank under the expanded foreign 
currency deposit system shall be subject to a final income tax at the 
rate of [seven and one-half percent (71/2%)] FIFTEEN PERCENT 
(15%) of such interest income.


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“(b) Income Derived under the Expanded Foreign Currency 
Deposit System. -  x x x
“(c) Capital Gains from Sale of Shares of Stock Not Traded in 
the Stock Exchange. -  A final tax at the rate [s prescribed below] OF 
FIFTEEN PERCENT (15%) is hereby imposed upon the net capital 
gains realized during the taxable year from the sale, barter, exchange 
or other disposition of shares of stock in a domestic corporation except 
shares sold or disposed of through the stock exchange:
[“Not over PI 00,000 .....................................  5%
“On any amount in excess of P I00,000 ..... 10%]
“(d) Intercorporate Dividends. -  x x x 
“(B) Tax on Nonresident Foreign Corporation. -  
“(1) In General. -  Except as otherwise provided in this Code, a 
foreign corporation not engaged in trade or business in the Philippines, 
EFFECTIVE JANUARY 1, 2020, shall pay a tax equal to [thirty-five 
percent (35%)] TWENTY-NINE PERCENT (29%) of the gross income 
received during each taxable year from all sources within the 
Philippines, such as interests, dividends, rents, royalties, salaries, 
premiums (except reinsurance premiums), annuities, emoluments or 
other fixed or determinable annual, periodic or casual gains, profits and 
income, and capital gains, except capital gains subject to tax under 
subparagraph 5(c): 
[Provided, That effective January 1, 2009, the
rate of income tax shall be thirty percent (30%).] PROVIDED, THAT 
THE RATE OF CORPORATE INCOME TAX SHALL BE TWENTY- 
EIGHT PERCENT (28%) BEGINNING JANUARY 1, 2021; TWENTY- 
SEVEN PERCENT (27%) BEGINNING JANUARY 1, 2022; TWENTY- 
SIX PERCENT (26%) BEGINNING JANUARY 1, 2023; TWENTY- 
FIVE PERCENT (25%) BEGINNING JANUARY 1, 2024; TWENTY- 
FOUR PERCENT (24%) BEGINNING JANUARY 1, 2025: TWENTY- 
THREE PERCENT (23%) BEGINNING JANUARY 1, 2026; TWENTY- 
TWO PERCENT (22%) BEGINNING JANUARY 1, 2027; TWENTY- 
ONE PERCENT (21%) BEGINNING JANUARY 1, 2028; AND 
TWENTY 
PERCENT 
(20%) 
BEGINNING 
JANUARY 
1, 
2029: 
PROVIDED, FURTHER, THAT THE SCHEDULED DECREASE IN 
THE RATE BEGINNING 2025 MAY BE SUSPENDED BY THE 
PRESIDENT UPON RECOMMENDATION OF THE SECRETARY OF 
FINANCE IF THE PROJECTED DEFICIT TARGET AS A PERCENT 
OF 
GROSS 
DOMESTIC 
PRODUCT 
(GDP) 
EXCEEDS 
THE 
PROGRAMMED 
DEFICIT, 
AS 
DETERMINED 
BY 
THE 
DEVELOPMENT BUDGET COORDINATION COMMITTEE (DBCC) 
IN 
THE 
PRECEDING 
YEAR 
PRIOR TO 
THE 
SCHEDULED 
REDUCTION IN THE CORPORATE INCOME TAX RATE, BASED 
ON THE ANNUAL REVIEW OF THE MEDIUM TERM FISCAL 
PROGRAM.


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“(2) Nonresident Cinematographic Film Owner, Lessor or 
Distributor. -  A cinematographic film owner, lessor, or distributor shall 
pay a tax of twenty-five percent (25%) of its gross income from all 
sources within the Philippines.
'‘(3) 
XXX 
“(4) 
XXX
"(5) Tax on Certain Incomes Received by a Nonresident Foreign 
Corporation. -
“(a) Interest on Foreign Loans. -  x x x
"(b) Intercorporate Dividends. -  A final withholding tax at the 
rate of fifteen percent (15%) is hereby imposed on the amount of cash 
and/or property dividends received from a domestic corporation, which 
shall be collected and paid as provided in Section 57 (A) of this Code, 
subject to the condition that the country in which the nonresident 
foreign corporation is domiciled, shall allow a credit against the tax due 
from the nonresident foreign corporation taxes deemed to have been 
paid in the Philippines equivalent to [twenty percent (20%)] FIFTEEN 
PERCENT (15%), which represents the difference between the regular 
income tax [of thirty-five percent (35%)] and the fifteen percent (15%) 
tax on dividends as provided in this subparagraph: 
Provided, That
[effective January 1, 2009] EFFECTIVE JANUARY 1, 2020, the credit 
against the tax due shall be equivalent to [fifteen percent (15%), which 
represents] the difference between the regular income tax RATE [of 
thirty percent (30%)] and the fifteen percent (15%) tax on dividends;
“(c) Capital Gains from Sale of Shares of Stock not Traded in 
the Stock Exchange. -  A final tax at the rate[s prescribed below] OF 
FIFTEEN PERCENT (15%) is hereby imposed upon the net capital 
gains realized during the taxable year from the sale, barter, exchange 
or other disposition of shares of stock in a domestic corporation, 
except shares sold, or disposed of through the stock exchange.[:
“Not over P I00,000 ........................................ 5%
“On any amount in excess of P I00,000 .... 10%]"
SEC. 7. Section 34 of the National Internal Revenue Code of 1997, 
amended, is hereby further amended to read as follows:
“SEC. 34. 
Deductions from Gross income. -  Except for 
taxpayers earning compensation income arising from personal 
services rendered under an employer-employee relationship where no 
deductions shall be allowed under this Section, in computing taxable 
income subject to income tax under Sections 24(A); 25(A); 26; 27(A), 
(B), and (C); and 28(A)(1), there shall be allowed the following 
deductions from gross income:
“(A) Expenses. -
“(1) Ordinary and Necessary Trade, Business or Professional 
Expenses. -
as


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XXX
“(B) Interest. -
“(1) In General. -  The amount of interest paid or incurred within 
a taxable year on indebtedness in connection with the taxpayer’s 
profession, trade or business shall be allowed as deduction from gross 
income: Provided, however, That the taxpayer’s otherwise allowable 
deduction for interest expense shall be reduced by [forty-two percent 
(42%)] THIRTY-THREE PERCENT (33%) of the interest income 
subjected to final tax:[Provided. That effective January 1, 2009, the 
percentage 
shall 
be 
thirty-three 
percent 
(33%).] 
PROVIDED, 
FURTHER, THAT THE 
FOLLOWING 
PERCENTAGES SHALL 
APPLY IF THE CORPORATE INCOME TAX RATE AS PROVIDED IN 
SECTIONS 27(A) AND 28(A)(1) IS ADJUSTED:
“ (A) IF RATE IS TWENTY-NINE PERCENT (29%), INTEREST 
EXPENSE REDUCTION RATE IS THIRTY-ONE PERCENT (31%);
“ (B) 
IF 
RATE IS 
TWENTY-EIGHT 
PERCENT 
(28%),
INTEREST 
EXPENSE 
REDUCTION 
RATE 
IS 
TWENTY-NINE 
PERCENT (29%);
“ (C) 
IF 
RATE IS 
TWENTY-SEVEN 
PERCENT 
(27%),
INTEREST 
EXPENSE REDUCTION 
RATE 
IS 
TWENTY-SIX
PERCENT (26%);
“ (D) IF RATE IS TWENTY-SIX PERCENT (26%), INTEREST 
EXPENSE REDUCTION RATE IS TWENTY-THREE PERCENT 
(23%);
“ (E) IF RATE IS TWENTY-FIVE PERCENT (25%), INTEREST 
EXPENSE REDUCTION RATE IS TWENTY PERCENT (20%);
“ (F) IF RATE IS TWENTY-FOUR PERCENT (24%), INTEREST 
EXPENSE REDUCTION RATE IS SIXTEEN PERCENT (16%);
“ (G) 
IF 
RATE IS 
TWENTY-THREE 
PERCENT 
(23%),
INTEREST EXPENSE REDUCTION RATE IS THIRTEEN PERCENT 
(13%);
“ (H) IF RATE IS TWENTY-TWO PERCENT (22%), INTEREST 
EXPENSE REDUCTION RATE IS NINE PERCENT (9%);
“ (I) IF RATE IS TWENTY-ONE PERCENT (21%), INTEREST 
EXPENSE REDUCTION RATE IS FIVE PERCENT (5%);
“ (J) IF RATE IS TWENTY PERCENT (20%), INTEREST 
EXPENSE REDUCTION RATE IS ZERO PERCENT (0%).
PROVIDED, FINALLY, THAT IF THE INTEREST INCOME 
TAX IS ADJUSTED IN THE FUTURE, THE INTEREST EXPENSE 
REDUCTION RATE SHALL BE ADJUSTED ACCORDINGLY BASED 
ON THE PRESCRIBED STANDARD FORMULA AS DEFINED IN 
THE RULES AND REGULATIONS TO BE PROMULGATED BY THE 
SECRETARY OF FINANCE, UPON THE RECOMMENDATION OF 
THE COMMISSIONER OF INTERNAL REVENUE.


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“(2) XXX
2 
"(C) Taxes. -  x x x
3 
“(D) Losses. -  X X X
4 
“(E) Bad Debts. -  x x x
5 
“(F) Depreciation. -  x x x
6 
“(G) Depletion of Oil and Gas Wells and Mines. -  x x x
7 
“(H) Charitable and Other Contributions. -  x x x
8 
“(I) Research and Development. -  x x x
9 
“(J) Pension Trusts. -  x x x
10 
“(K) 
Additional Requirements for Deductibility of Certain
11 
Payments. -  x x x
12 
"(L) Optional Standard Deduction (OSD). -  x x x
13 
SEC. 8. Section 290 of the National Internal Revenue Code of 1997, as
14 
am ended, is hereby further am ended to read as follows:
15 
“SEC. 290. Congressional Oversight Committee. -
16 
“A C ongressional O versight Com m ittee, hereinafter referred to
17 
as the Com m ittee, is hereby constituted in accordance with the
18 
provisions of this Code. The C om m ittee shall be com posed of the
19 
[C hairm en] C H AIR PER SO N S of the C om m ittee on W ays and Means
20 
of the Senate and House of R epresentatives...x x x
21 
“The C om m ittee shall, am ong others, in aid of legislation:
22 
“( 1 ) x x x ;
23 
“(2) X X x;
24 
“(3) X X x; [and]
25 
“(4) X X x[.];
26 
"(5) 
R EVIEW  
THE 
PER FO RM ANCE 
OF 
THE 
FISC AL
27 
INCENTIVES REVIEW  B O AR D ; AND
28 
“X X X.”
29 
SEC. 9. A new Title XIII shall be introduced in the National Internal Revenue
30 
Code of 1997, as am ended, to read as follows:
31 
“TITLE XIII
32 
TAX INCENTIVES
33 
C H APTER  I
34 
G E N E R A L PRO VISIO NS ON TAX INCENTIVES
35 
SEC 291. SCOPE AND COVERAGE. -  THIS TITLE S H A LL
36 
COVER A LL EXISTING IN VESTM EN T PROM OTION AG EN C IES AS
37 
DEFINED IN THIS CODE OR R ELATED  LAW S, AND A L L  OTHER
38 
INVESTM EN T 
PROM OTION 
AG EN C IES 
AND 
SIM ILAR
39 
AU TH O R ITIES TH AT M AY BE CREATED  BY LA W  IN THE FUTURE.
40 
THE 
INVESTM EN T 
PRO M O TIO N 
AG EN C IES 
S H A LL
41 
M AIN TAIN  THEIR FUNCTIONS AND POW ERS AS PRO VIDED
42 
UNDER THE S P E C IA L LAW S G O VERNING  THEM EXCEPT TO THE
43 
EXTENT M O DIFIED BY THE PRO VISIO NS OF THIS CODE.
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"SEC. 292. EXTENT OF AUTHORITY TO GRANT TAX 
INCENTIVES. 
-  ALL INVESTMENT PROMOTION AGENCIES 
SHALL PROCESS APPLICATIONS FOR TAX INCENTIVES AND 
RECOMMEND TO THE FISCAL INCENTIVES REVIEW BOARD THE 
APPROPRIATE TAX INCENTIVES PROVIDED IN THIS TITLE TO 
BE GRANTED TO REGISTERED BUSINESS ENTERPRISES ONLY 
TO THE EXTENT OF THEIR APPROVED REGISTERED PROJECT 
OR ACTIVITY UNDER THE STRATEGIC INVESTMENT PRIORITY 
PLAN.
“SEC. 293. DEFINITIONS. -  WHEN USED IN THIS TITLE:
“(A) 
CAPITAL EQUIPMENT REFERS 
TO MACHINERY, 
EQUIPMENT, 
MAJOR 
COMPONENTS 
THEREOF, 
TOOLS, 
DEVICES, 
OR 
APPARATUS, 
WHICH 
ARE 
DIRECTLY 
OR 
REASONABLY NEEDED IN THE REGISTERED PROJECT OR 
ACTIVITY OF THE REGISTERED ENTERPRISE;
“ (B) DIRECT LOCAL EMPLOYMENT REFERS TO THE 
HIRING 
OF 
FILIPINOS 
BY 
REGISTERED 
BUSINESS 
ENTERPRISES 
UNDER 
AN 
EMPLOYER-EMPLOYEE 
RELATIONSHIP TO PERFORM FUNCTIONS THAT ARE DIRECTLY 
RELATED TO THE PRODUCTION OF GOODS OR PERFORMANCE 
OF 
SERVICES 
UNDER 
THE 
REGISTERED 
PROJECT 
OR 
ACTIVITY;
“ (C) DOMESTIC INPUT REFERS TO PURCHASES OF 
LOCALLY MANUFACTURED GOODS OR LOCALLY PRODUCED 
RAW MATERIALS OR DOMESTICALLY OUTSOURCED SERVICES 
KNOWN AS SERVICES EMBEDDED IN MANUFACTURING THAT 
ARE USED DIRECTLY IN THE PRODUCTION OF GOODS UNDER 
THE REGISTERED PROJECT OR ACTIVITY. 
IN THE CASE OF 
LOCALLY MANUFACTURED GOODS, 50% OF THE VALUE- 
ADDED OF THE SAID GOOD SHOULD LIKEWISE BE LOCALLY 
PRODUCED OR MANUFACTURED;
(D) 
FREEPORT ZONES REFERS TO AN ISOLATED AND 
POLICED AREA ADJACENT TO A PORT OF ENTRY, WHICH 
SHALL BE OPERATED AND MANAGED AS A SEPARATE 
CUSTOMS TERRITORY TO ENSURE FREE FLOW OR MOVEMENT 
OF GOODS, 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 WITHOUT 
BEING SUBJECT TO IMPORT DUTIES. HOWEVER, MOVEMENT 
OF THESE IMPORTED GOODS FROM THE FREE-TRADE AREA 
TO A NON-FREE TRADE AREA IN THE COUNTRY SHALL BE 
SUBJECT TO ALL APPLICABLE INTERNAL REVENUE TAXES
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AND DUTIES: 
PROVIDED, 
THAT FOR THE FREEPORT TO 
QUALIFY AS A SEPARATE CUSTOMS TERRITORY, A FREEPORT 
SHALL 
HAVE 
A 
PERMANENT 
CUSTOMS 
CONTROL 
OR 
CUSTOMS OFFICE AT ITS PERIMETER;
(E) INVESTMENT PROMOTION AGENCIES (IPAS) REFER 
TO GOVERNMENT ENTITIES CREATED BY LAW, EXECUTIVE 
ORDER, DECREE OR OTHER ISSUANCE, 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, 
REGIONAL 
BOARD 
OF 
INVESTMENTS 
AUTONOMOUS REGION IN MUSLIM MINDANAO (RBOI-ARMM), 
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 ECONOMIC 
ZONE 
AUTHORITY 
(CEZA), 
ZAMBOANGA 
CITY 
SPECIAL 
ECONOMIC ZONE AUTHORITY (ZCSEZA), PHIVIDEC INDUSTRIAL 
AUTHORITY (PIA), AURORA PACIFIC ECONOMIC ZONE AND 
FREEPORT 
AUTHORITY 
(APECO), 
AUTHORITY 
OF 
THE 
FREEPORT 
AREA 
OF 
BATAAN 
(AFAB), 
TOURISM 
INFRASTRUCTURE 
AND 
ENTERPRISE 
ZONE 
AUTHORITY 
(TIEZA), AND ALL OTHER SIMILAR EXISTING AUTHORITIES OR 
THAT MAY BE CREATED BY LAW IN THE FUTURE;
(F) OTHER GOVERNMENT AGENCIES ADMINISTERING 
TAX INCENTIVES REFER TO GOVERNMENT AGENCIES OTHER 
THAN INVESTMENT PROMOTION AGENCIES WHICH REGISTER 
OR ADMINISTER TAX INCENTIVES OF ANY KIND TO ANY 
SPECIFIC ENTITIES AND/OR CLASS OF PERSONS PURSUANT 
TO ANY LAW;
“ (G) OTHER REGISTERED ENTITIES REFER TO ANY 
INDIVIDUAL, PARTNERSHIP, ORGANIZATION, CORPORATION, 
PHILIPPINE BRANCH OF A FOREIGN CORPORATION, OR OTHER 
ENTITY INCORPORATED AND/OR ORGANIZED AND EXISTING 
UNDER PHILIPPINE LAWS, AND REGISTERED WITH OTHER 
GOVERNMENT AGENCIES ADMINISTERING TAX INCENTIVES;
“ (H) QUALIFIED CAPITAL EXPENDITURE REFERS TO 
PURCHASES OF CAPITAL GOODS WITH A USEFUL LIFE OF 
MORE THAN ONE (1) YEAR ACQUIRED FOR THE ENTITY’S 
PRODUCTION OF GOODS AND SERVICES TO BE DIRECTLY
I2


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USED IN THE PROJECT OR ACTIVITY OF THE REGISTERED 
BUSINESS ENTERPRISE;
“ (I) REGISTERED BUSINESS ENTERPRISE REFERS TO 
ANY INDIVIDUAL, PARTNERSHIP, CORPORATION, PHILIPPINE 
BRANCH OF A FOREIGN CORPORATION, OR OTHER ENTITY 
ORGANIZED AND EXISTING UNDER PHILIPPINE LAWS AND 
REGISTERED WITH AN INVESTMENT PROMOTION AGENCY 
EXCLUDING 
SERVICE 
ENTERPRISES 
SUCH 
AS 
THOSE 
ENGAGED 
IN 
CUSTOMS 
BROKERAGE, 
TRUCKING 
OR 
FORWARDING SERVICES, JANITORIAL SERVICES, SECURITY 
SERVICES, INSURANCE, BANKING, AND OTHER FINANCIAL 
SERVICES, CONSUMERS’ COOPERATIVES, CREDIT UNIONS, 
CONSULTANCY 
SERVICES, 
RETAIL 
ENTERPRISES, 
RESTAURANTS, OR SUCH OTHER SIMILAR SERVICES, AS MAY 
BE DETERMINED BY THE FISCAL INCENTIVES REVIEW BOARD, 
IRRESPECTIVE OF LOCATION, WHETHER INSIDE OR OUTSIDE 
THE ZONES, DULY ACCREDITED OR LICENSED BY ANY OF THE 
INVESTMENT PROMOTION AGENCIES AND WHOSE INCOME 
DELIVERED 
WITHIN 
THE 
ECONOMIC 
ZONES 
SHALL 
BE 
SUBJECT TO TAXES 
UNDER THE NATIONAL 
INTERNAL 
REVENUE CODE OF 1997, AS AMENDED;
“(J) 
RESEARCH 
AND 
DEVELOPMENT 
REFERS 
TO 
EXPERIMENTAL 
OR 
OTHER 
RELATED 
PROJECTS 
OR 
ACTIVITIES:
“ (1) WHOSE OUTCOME CANNOT BE KNOWN OR 
DETERMINED IN ADVANCE ON THE BASIS OF CURRENT 
KNOWLEDGE, INFORMATION OR EXPERIENCE, BUT CAN 
ONLY BE DETERMINED BY APPLYING A SYSTEMATIC 
PROGRESSION OF WORK;
“ (I) BASED ON PRINCIPLES OF ESTABLISHED 
SCIENCE; AND
“ (II) 
PROCEEDS 
FROM 
HYPOTHESIS 
TO 
EXPERIMENT, OBSERVATION AND EVALUATION, 
AND LEADS TO LOGICAL CONCLUSIONS; AND 
“ (2) THAT ARE CONDUCTED FOR THE PURPOSE OF 
GENERATING 
NEW 
KNOWLEDGE, 
INCLUDING 
NEW 
KNOWLEDGE IN THE FORM OF NEW OR IMPROVED 
MATERIALS, 
PRODUCTS, 
DEVICES, 
PROCESSES 
OR 
SERVICES;
“ (K) SOURCE DOCUMENT REFERS TO INPUT MATERIALS 
AND DOCUMENTS REASONABLY NEEDED BY INFORMATION 
TECHNOLOGY (IT) AND IT-ENABLED INDUSTRIES SUCH AS 
BOOKS, 
DIRECTORIES, 
MAGAZINES, 
NEWSPAPERS, 
BROCHURES, PAMPHLETS, MEDICAL RECORDS OR FILES,
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LEGAL RECORDS OR FILES, INSTRUCTION MATERIALS, AND 
DRAWINGS, BLUEPRINTS, OR OUTLINES;
(L) SPECIAL ECONOMIC ZONE OR ECOZONE REFERS TO 
A SELECTED AREA, 
WHICH SHALL BE OPERATED AND 
MANAGED AS A SEPARATE CUSTOMS TERRITORY 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 AS A 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
“ (M) TRAINING REFERS TO COURSES PROVIDED TO 
FILIPINO EMPLOYEES WHOSE WORK IS DIRECTLY RELATED TO 
THE 
PRODUCTION 
OF 
GOODS 
OR 
PERFORMANCE 
OF 
SERVICES UNDER THE REGISTERED PROJECT OR ACTIVITY 
AND WHICH SHALL IMPROVE THE SPECIFIC SKILLS OR 
KNOWLEDGE OF THE EMPLOYEE REQUIRED IN HIS OR HER 
CURRENT EMPLOYMENT.
"CHAPTER II
“TAX AND DUTY INCENTIVES
SEC. 294. INCENTIVES. -  SUBJECT TO THE CONDITIONS 
AND PERIOD OF AVAILMENT IN SECTIONS 295 AND 296, 
RESPECTIVELY, THE FOLLOWING TYPES OF TAX INCENTIVES 
MAY BE GRANTED TO REGISTERED PROJECTS OR ACTIVITIES: 
“ (A) INCOME TAX HOLIDAY;
“ (B) SPECIAL CORPORATE INCOME TAX RATE - A TAX 
RATE 
EQUIVALENT TO 
EIGHT PERCENT (8%) EFFECTIVE 
JANUARY 1, 2020, NINE PERCENT (9%) EFFECTIVE JANUARY 1, 
2021, AND TEN PERCENT (10%) EFFECTIVE JANUARY 1, 2022 
ONWARDS, BASED ON THE GROSS INCOME EARNED, IN LIEU 
OF ALL TAXES, BOTH NATIONAL AND LOCAL, AS SPECIFIED IN
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THE 
RESPECTIVE 
SPECIAL 
LAWS 
OF 
THE 
INVESTMENT 
PROMOTION AGENCIES: PROVIDED, THAT, THE NATIONAL 
GOVERNMENT SHARE SHALL BE AS FOLLOWS: SIX PERCENT 
(6%) IN 2020, SEVEN PERCENT (7%) IN 2021 AND EIGHT 
PERCENT (8%) IN 2022 ONWARDS: PROVIDED FURTHER, THAT, 
IF APPLICABLE, THE SHARES OF THE LOCAL GOVERNMENT 
UNITS AND THE INVESTMENT PROMOTION AGENCIES UNDER 
THE SPECIAL LAWS GOVERNING THE LATTER SHALL BE 
OBSERVED;
“ (C) ENHANCED DEDUCTIONS:
(1) DEPRECIATION ALLOWANCE OF THE ASSETS 
ACQUIRED FOR THE ENTITY’S PRODUCTION OF GOODS 
AND SERVICES (QUALIFIED CAPITAL EXPENDITURE) -  
ADDITIONAL TEN PERCENT (10%) FOR BUILDINGS; AND 
ADDITIONAL TWENTY PERCENT (20%) FOR MACHINERIES 
AND EQUIPMENT;
"(2) UP TO FIFTY PERCENT (50%) ADDITIONAL 
DEDUCTION ON THE LABOR EXPENSE INCURRED IN THE 
TAXABLE YEAR;
(3) 
UP 
TO 
ONE 
HUNDRED 
PERCENT 
(100%) 
ADDITIONAL 
DEDUCTION 
ON 
RESEARCH 
AND 
DEVELOPMENT EXPENSE INCURRED IN THE TAXABLE 
YEAR;
“(4) 
UP 
TO 
ONE 
HUNDRED 
PERCENT 
(100%) 
ADDITIONAL 
DEDUCTION 
ON 
TRAINING 
EXPENSE 
INCURRED IN THE TAXABLE YEAR;
“ (5) UP TO FIFTY PERCENT (50%) ADDITIONAL 
DEDUCTION ON DOMESTIC INPUT EXPENSE INCURRED IN 
THE TAXABLE YEAR;
(6) UP TO FIFTY PERCENT (50%) ADDITIONAL 
DEDUCTION ON POWER EXPENSE INCURRED IN THE 
TAXABLE YEAR;
“ (7) DEDUCTION FOR REINVESTMENT ALLOWANCE 
TO 
MANUFACTURING 
INDUSTRY 
- 
WHEN 
A 
MANUFACTURING REGISTERED BUSINESS ENTERPRISE 
REINVESTS ITS UNDISTRIBUTED PROFIT OR SURPLUS IN 
ANY OF THE PROJECTS OR ACTIVITIES LISTED IN THE 
STRATEGIC INVESTMENT PRIORITY PLAN, 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
“ (8) ENHANCED NET OPERATING LOSS CARRY­
OVER (NOLCO). -  THE NET OPERATING LOSS OF THE
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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 GROSS INCOME MAY BE CARRIED 
OVER AS DEDUCTION FROM GROSS INCOME WITHIN THE 
NEXT 
FIVE 
(5) 
CONSECUTIVE 
TAXABLE 
YEARS 
IMMEDIATELY FOLLOWING THE YEAR OF SUCH LOSS.
"(D) DUTY EXEMPTION ON IMPORTATION OF CAPITAL 
EQUIPMENT, 
RAW 
MATERIALS, 
SPARE 
PARTS, 
OR 
ACCESSORIES;
(E) 
VALUE-ADDED 
TAX 
(VAT) 
EXEMPTION 
ON 
IMPORTATION AND VAT ZERO-RATING ON LOCAL PURCHASES.
SEC. 295. CONDITIONS OF AVAILMENT. - THE TAX 
INCENTIVES 
IN 
THE 
PRECEDING 
SECTION 
SHALL 
BE 
GOVERNED BY THE FOLLOWING RULES:
“ (A) THE INCOME TAX HOLIDAY SHALL BE FOLLOWED BY 
THE SPECIAL CORPORATE INCOME TAX RATE;
“ (B) 
ENHANCED DEDUCTIONS MAY BE GRANTED IN 
LIEU OF THE INCOME TAX HOLIDAY AND THE SPECIAL 
CORPORATE INCOME TAX RATE: PROVIDED, THAT IN NO CASE 
SHALL 
THE 
ENHANCED 
DEDUCTIONS 
BE 
GRANTED 
SIMULTANEOUSLY WITH THE SPECIAL CORPORATE INCOME 
TAX: PROVIDED, FURTHER, THAT THE FISCAL INCENTIVES 
REVIEW BOARD AND THE BOARD OF INVESTMENTS, SHALL 
PRESCRIBE THE TERMS AND CONDITIONS ON THE GRANT OF 
ENHANCED DEDUCTIONS UNDER SECTION 294(C), INCLUDING 
THE APPROPRIATE LEVEL OF PERCENTAGE OF DEDUCTIONS.
“THE FOLLOWING CONDITIONS FOR THE AVAILMENT OF 
EACH ENHANCED DEDUCTIONS SHALL BE COMPLIED WITH:
“ (1) THE DEPRECIATION ALLOWANCE OF THE 
ASSETS ACQUIRED FOR THE ENTITY’S PRODUCTION OF 
GOODS 
AND 
SERVICES 
(QUALIFIED 
CAPITAL 
EXPENDITURE) SHALL BE ALLOWED FOR ASSETS THAT 
ARE 
DIRECTLY 
RELATED 
TO 
THE 
REGISTERED 
ENTERPRISE’S PRODUCTION OF GOODS AND SERVICES 
OTHER THAN ADMINISTRATIVE AND OTHER SUPPORT 
SERVICES;
“ (2) THE ADDITIONAL DEDUCTION ON THE LABOR 
EXPENSE SHALL NOT INCLUDE SALARIES, WAGES, 
BENEFITS, AND OTHER PERSONNEL COSTS INCURRED 
FOR MANAGERIAL, ADMINISTRATIVE, INDIRECT LABOR, 
AND SUPPORT SERVICES.
“ (3) THE ADDITIONAL DEDUCTION ON RESEARCH 
AND DEVELOPMENT EXPENSE SHALL ONLY APPLY TO
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RESEARCH AND DEVELOPMENT DIRECTLY RELATED TO 
THE REGISTERED PROJECT OR ACTIVITY OF THE ENTITY.
“ (4) THE ADDITIONAL DEDUCTION ON TRAINING 
EXPENSE 
SHALL 
ONLY APPLY TO 
TRAININGS, 
AS 
APPROVED BY THE INVESTMENT PROMOTION AGENCIES 
BASED ON THE STRATEGIC INVESTMENT PRIORITY 
PLAN, GIVEN TO THE FILIPINO EMPLOYEES ENGAGED 
DIRECTLY IN THE REGISTERED BUSINESS ENTERPRISE’S 
PRODUCTION OF GOODS AND SERVICES.
“ (5) THE ADDITIONAL DEDUCTION ON DOMESTIC 
INPUT EXPENSE SHALL ONLY APPLY TO DOMESTIC 
INPUT THAT ARE DIRECTLY RELATED TO AND ACTUALLY 
USED 
IN 
THE 
REGISTERED 
EXPORT 
PROJECT 
OR 
ACTIVITY OF THE REGISTERED BUSINESS ENTERPRISE.
“ (6) THE ADDITIONAL DEDUCTION ON POWER 
EXPENSE SHALL ONLY APPLY TO POWER UTILIZED FOR 
THE REGISTERED PROJECT OR ACTIVITY.
“ (7) 
THE 
DEDUCTION 
FOR 
REINVESTMENT 
ALLOWANCE TO MANUFACTURING INDUSTRY SHALL BE 
DETERMINED IN THE STRATEGIC INVESTMENT PRIORITY 
PLAN.
“ (C) THE DUTY EXEMPTION SHALL ONLY APPLY TO THE 
IMPORTATION OF CAPITAL EQUIPMENT, RAW MATERIALS, 
SPARE 
PARTS, 
OR 
ACCESSORIES 
DIRECTLY 
AND 
EXCLUSIVELY 
USED 
IN 
THE 
REGISTERED 
PROJECT 
OR 
ACTIVITY 
BY 
REGISTERED 
BUSINESS 
ENTERPRISES: 
PROVIDED, 
THAT 
THE 
FOLLOWING 
CONDITIONS 
ARE 
COMPLIED WITH:
“(1) THE CAPITAL EQUIPMENT, RAW MATERIALS, 
SPARE PARTS, OR ACCESSORIES ARE DIRECTLY AND 
REASONABLY NEEDED AND WILL BE USED EXCLUSIVELY 
IN 
AND AS 
PART OF THE 
DIRECT COST OF THE 
REGISTERED PROJECT OR ACTIVITY OF THE REGISTERED 
BUSINESS ENTERPRISE, 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 BE SECURED 
FOR THE PART-TIME UTILIZATION OF SAID CAPITAL 
EQUIPMENT, 
RAW 
MATERIALS, 
SPARE 
PARTS, 
OR 
ACCESSORIES 
IN A NON-REGISTERED PROJECT OR 
ACTIVITY TO MAXIMIZE USAGE THEREOF: PROVIDED, 
THAT THE PROPORTIONATE TAXES AND DUTIES ARE 
PAID 
ON 
A 
SPECIFIC 
CAPITAL 
EQUIPMENT, 
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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 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.
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 
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 ENTERPRISE NOT 
AVAILING OF DUTY EXEMPTION ON IMPORTED 
CAPITAL EQUIPMENT, RAW MATERIALS, SPARE 
PARTS, OR ACCESSORIES, UPON PAYMENT OF ANY 
TAXES AND DUTIES DUE ON THE NET BOOK VALUE 
OF THE CAPITAL EQUIPMENT, RAW MATERIALS, 
SPARE PARTS, OR ACCESSORIES TO BE SOLD;
“(c) 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 
EQUIPMENT, 
RAW 
MATERIALS, 
SPARE PARTS, OR ACCESSORIES.
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‘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 
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 THE APPROVAL OF 
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.
“(D) THE VAT EXEMPTION ON IMPORTATION AND VAT 
ZERO-RATING ON LOCAL PURCHASES SHALL ONLY APPLY TO 
GOODS AND SERVICES DIRECTLY AND EXCLUSIVELY USED IN 
THE REGISTERED PROJECT OR ACTIVITY BY REGISTERED 
BUSINESS ENTERPRISE LOCATED INSIDE AN ECOZONE OR 
FREEPORT.
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.
“ SEC. 296. PERIOD OF AVAILMENT. -THE PERIOD OF 
AVAILMENT OF INCENTIVE BY THE REGISTERED BUSINESS 
ENTERPRISE SHALL FOLLOW THREE CATEGORIES: A (BASIC), 
B (ENHANCED), AND C (ADVANCED):
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“ (A) INCOME TAX HOLIDAY (ITH) FOLLOWED BY 
SPECIAL CORPORATE INCOME TAX RATE (SCIT)
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CATEGORY
ITH
DURATION IN 
YEARS
SCIT
DURATION IN 
YEARS
TOTAL 
IN YEARS
A (BASIC)
2
3
5
B (ENHANCED)
3
4
7
C (ADVANCED)
4
4
8
“THE
PERIOD OF AVAILMENT OF THE SPECIA
CORPORATE INCOME TAX RATE BY THE REGISTERED 
BUSINESS ENTERPRISE MAY BE EXTENDED BY THREE 
(3) OR FOUR (4) YEARS, AT ANY ONE TIME, DEPENDING 
ON THE CATEGORY, SUBJECT TO THE QUALIFICATIONS 
SET FORTH IN THE STRATEGIC INVESTMENT PRIORITY 
PLAN AND PERFORMANCE REVIEW BY THE FISCAL 
INCENTIVES REVIEW BOARD: 
PROVIDED, THAT THE
TOTAL PERIOD OF INCENTIVE AVAILMENT SHALL NOT 
EXCEED TWELVE (12) YEARS, PROVIDED FURTHER, THAT 
EXISTING REGISTERED PROJECTS OR ACTIVITIES PRIOR 
TO THE EFFECTIVITY OF THIS ACT MAY QUALIFY TO 
REGISTER UNDER THIS ACT AND AVAIL OF THE SPECIAL 
CORPORATE 
INCOME 
TAX 
FOR 
THE 
PRESCRIBED 
PERIOD SUBJECT TO THE CRITERIA AND CONDITIONS 
SET FORTH IN THE STRATEGIC INVESTMENT PRIORITY 
PLAN.
“ (B) ENHANCED DEDUCRONS
CATEGORY
TOTAL IN YEARS
A (BASIC)
5
B (ENHANCED)
7
C (ADVANCED)
8
“ THE 
PERIOD 
OF 
AVAILMENT 
OF 
ENHANCED 
DEDUCTION 
BY 
THE 
REGISTERED 
BUSINESS 
ENTERPRISE MAY BE EXTENDED BY THREE (3) OR FOUR 
(4) YEARS, AT ANY ONE TIME, DEPENDING ON THE 
CATEGORY, SUBJECT TO THE QUALIFICATIONS SET 
FORTH IN THE STRATEGIC INVESTMENT PRIORITY PLAN 
AND 
PERFORMANCE 
REVIEW 
BY 
THE 
FISCAL 
INCENTIVES REVIEW BOARD, 
PROVIDED, 
THAT THE 
TOTAL PERIOD OF INCENTIVE AVAILMENT SHALL NOT 
EXCEED TWELVE (12) YEARS.
‘‘PROVIDED FURTHER, 
THAT THE 
PERIOD 
OF 
AVAILMENT OF 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
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OTHERWISE PROVIDED IN THE STRATEGIC INVESTMENT 
PRIORITY PLAN AND ITS CORRESPONDING GUIDELINES.
“ FOR THE 
PURPOSE OF THIS SECTION, 
THE 
DETERMINATION OF THE CATEGORY SHALL BE BASED 
ON 
BOTH 
LOCATION 
AND 
INDUSTRY 
OF 
THE 
REGISTERED 
PROJECT 
OR 
ACTIVITY, 
AND 
OTHER 
RELEVANT FACTORS AS MAY BE DEFINED IN THE 
STRATEGIC INVESTMENT PRIORITY PLAN.
“THE LOCATION OF THE REGISTERED PROJECT 
OR ACTIVITY SHALL BE PRIORITIZED ACCORDING TO 
THE ECONOMIC LEVEL OF DEVELOPMENT AS FOLLOWS:
(1) LESS DEVELOPED AREAS, AS DETERMINED BY THE 
NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY;
(2) 
AREAS 
ADJACENT 
TO 
NCR 
WHICH 
INCLUDE 
BULACAN, CAVITE, LAGUNA AND RIZAL; (3) NCR AND 
OTHER 
MAJOR 
METROPOLITAN 
AREAS; 
PROVIDED 
THAT, FOR ALL OTHER AREAS, THE FISCAL INCENTIVES 
REVIEW BOARD SHALL DETERMINE THE APPLICABLE 
INDUSTRY TIER IN ACCORDANCE WITH THE STRATEGIC 
INVESTMENT PRIORITY PLAN, WHICH IS SUBJECT TO 
REVIEW AND REVISION, EVERY THREE (3) YEARS OR AS 
MAY BE NEEDED.
“THE INDUSTRY OF THE REGISTERED PROJECT OR 
ACTIVITY 
SHALL 
BE 
PRIORITIZED 
ACCORDING 
TO 
NATIONAL 
INDUSTRIAL 
STRATEGY 
AS 
FOLLOWS, 
SUBJECT TO REVIEW AND REVISION EVERY THREE 
YEARS 
IN 
ACCORDANCE 
WITH 
THE 
STRATEGIC 
INVESTMENT PRIORITY PLAN:
“ (1) TIER I ACTIVITIES SHALL INCLUDE, BUT 
NOT BE LIMITED TO, THE FOLLOWING ACTIVITIES: 
AGRICULTURE, 
FISHING, 
FORESTRY 
AND 
AGRIBUSINESS ACTIVITIES, INCLUDING EMERGING 
MANUFACTURING 
AND 
SERVICES 
INDUSTRIES 
THAT ARE INNOVATING, UPGRADING AND MOVING 
UP 
THE 
VALUE 
CHAIN, 
AS 
WELL 
AS 
INFRASTRUCTURE, TRANSPORTATION, UTILITIES 
AND LOGISTICS THAT ARE CRUCIAL TO THE 
COUNTRY’S INDUSTRIALIZATION;
“ (2) TIER II ACTIVITIES SHALL INCLUDE, BUT 
NOT BE LIMITED TO, THE FOLLOWING ACTIVITIES: 
ACTIVITIES THAT PRODUCE SUPPLIES, PARTS AND 
COMPONENTS 
THAT 
ARE 
NOT 
LOCALLY 
PRODUCED 
OR 
MANUFACTURED 
BUT 
ARE 
CRITICAL TO INDUSTRIAL DEVELOPMENT AND 
IMPORT-SUBSTITUTING 
ACTIVITIES 
OPERATING 
UNDER HIGH-CONTESTABLE MARKETS; AND
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“(3) TIER III ACTIVITIES SHALL INCLUDE, BUT 
NOT BE LIMITED TO, THE FOLLOWING ACTIVITIES: 
HIGHLY 
TECHNICAL 
MANUFACTURING 
AND 
SERVICES 
ACTIVITIES 
THAT 
INDISPENSABLY 
REQUIRES THE EMPLOYMENT OF KNOWLEDGE, 
MODERN SCIENCE, ENGINEERING, AND RESEARCH 
IN THE PROCESS OF PRODUCTION OF GOODS AND 
SERVICES, 
RESULTING 
IN 
DEMONSTRABLY 
SIGNIFICANT VALUE-ADDED AND HIGH PAYING 
JOBS.
“THE COMBINATION OF BOTH LOCATION AND 
INDUSTRY 
PRIORITIES 
SHALL 
DETERMINE 
THE 
CATEGORY OF INCENTIVE AS INDICATED HEREIN. THE 
FISCAL INCENTIVES REVIEW BOARD AND THE BOARD OF 
INVESTMENTS, SHALL REVIEW, AND REVISE, EVERY 
THREE (3) YEARS 
OR AS 
MAY 
BE 
NEEDED, 
THE 
LOCATION AND INDUSTRY PRIORITIES IN ACCORDANCE 
WITH THE STRATEGIC INVESTMENT PRIORITY PLAN.
LOCATION / INDUSTRY 
TIERS
TIER 1
TIER II
TIER III
NCR AND OTHER 
METROPOLITAN AREAS
A
B
C
AREAS ADJACENT TO 
NCR (BULACAN, CAVITE, 
LAGUNA, AND RIZAL)
B
B
C
LESS DEVELOPED 
AREAS
C
C
C
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“CHAPTER III
“THE FISCAL INCENTIVES REVIEW BOARD 
SEC. 297. EXPANDED FUNCTIONS OF THE FISCAL 
INCENTIVES REVIEW BOARD. -  THE FUNCTIONS AND POWERS 
OF THE FISCAL INCENTIVES REVIEW BOARD CREATED UNDER 
PRESIDENTIAL DECREE (PD) NO. 776, AS AMENDED, SHALL BE 
EXPANDED AS FOLLOWS:
“ (A) 
TO 
EXERCISE 
POLICY 
MAKING 
AND 
OVERSIGHT FUNCTIONS ON THE ADMINISTRATION AND 
GRANT OF TAX 
INCENTIVES 
BY THE 
INVESTMENT 
PROMOTION 
AGENCIES 
AND 
OTHER 
GOVERNMENT 
AGENCIES 
ADMINISTERING 
TAX 
INCENTIVES. 
IN 
PARTICULAR, THE FISCAL INCENTIVES REVIEW BOARD 
SHALL:
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“ (1) 
DETERMINE 
THE 
TARGET 
PERFORMANCE 
METRICS 
AS 
CONDITIONS 
TO 
AVAIL OF TAX INCENTIVES;
“ (2) REVIEW AND AUDIT THE COMPLIANCE 
OF 
INVESTMENT 
PROMOTION 
AGENCIES 
AND 
OTHER GOVERNMENT AGENCIES ADMINISTERING 
TAX 
INCENTIVES, 
WITH 
RESPECT 
TO 
THE 
ADMINISTRATION AND GRANT OF TAX INCENTIVES 
AND IMPOSE SANCTIONS SUCH AS BUT NOT 
LIMITED 
TO 
WITHDRAWAL, 
SUSPENSION, 
OR 
CANCELATION OF THEIR POWER TO GRANT TAX 
INCENTIVES;
“ (3) DETERMINE THE MINIMUM CONTIGUOUS 
LAND AREA THAT VERTICAL ECONOMIC ZONES 
SHOULD COMPLY WITH;
“ (4) CONDUCT REGULAR MONITORING AND 
EVALUATION 
OF 
INVESTMENT 
AND 
NON­
INVESTMENT TAX INCENTIVES, SUCH AS USING 
COST-BENEFIT ANALYSIS (CBA) TO DETERMINE 
THEIR IMPACT ON THE ECONOMY AND WHETHER 
AGREED PERFORMANCE TARGETS ARE MET; AND
“ (5) CHECK AND VERIFY, AS NECESSARY, 
THE 
COMPLIANCE 
OF 
REGISTERED 
BUSINESS 
ENTERPRISES WITH THE TERMS AND CONDITIONS 
OF 
THEIR 
AVAILMENT, 
IN 
PARTICULAR 
THE 
AGREED 
TARGET 
PERFORMANCE 
METRICS, 
RULES AND REGULATIONS OF THIS ACT, AND 
OTHER RELEVANT LAWS OR ISSUANCES;
“ (B) TO APPROVE OR DISAPPROVE, THE GRANT 
OF 
TAX 
INCENTIVES 
TO 
THE 
EXTENT 
OF 
THE 
REGISTERED 
PROJECT 
OR 
ACTIVITY 
UPON 
THE 
RECOMMENDATION OF THE INVESTMENT PROMOTION 
AGENCY; PROVIDED, THAT THE APPLICATION FOR TAX 
INCENTIVES SHALL BE DEEMED APPROVED IF NOT 
DECIDED UPON BY THE FISCAL INCENTIVES REVIEW 
BOARD AFTER FORTY-FIVE (45) WORKING DAYS FROM 
THE SUBMISSION OF THE INVESTMENT PROMOTION 
AGENCY RECOMMENDATION TO THE FISCAL INCENTIVES 
REVIEW BOARD: PROVIDED FURTHER, THAT THE FISCAL 
INCENTIVES 
REVIEW 
BOARD 
MAY 
DELEGATE 
THE 
GRANT 
OF 
TAX 
INCENTIVES 
TO 
THE 
TECHNICAL 
COMMITTEE OF THE FISCAL INCENTIVES REVIEW BOARD 
OR TO THE CONCERNED INVESTMENT PROMOTION 
AGENCY: PROVIDED FINALLY, THAT THE FIRB SHALL
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PRESCRIBE THE CONDITIONS ON THE DELEGATION OF 
APPROVAL OF TAX INCENTIVES.
“ FOR 
THIS 
PURPOSE, 
THE 
INVESTMENT 
PROMOTION 
AGENCY 
CONCERNED 
SHALL 
ENSURE 
COMPLETE 
SUBMISSION 
OF 
APPLICATIONS, 
DOCUMENTS, 
RECORDS, 
BOOKS, 
OR 
OTHER 
DATA 
RELEVANT OR MATERIAL TO ITS RECOMMENDATION.”
“ (C) 
TO 
APPROVE 
APPLICATIONS 
FOR 
TAX 
SUBSIDIES TO GOVERNMENT OWNED AND 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 DATA RELEVANT OR MATERIAL;
“ (D) TO CANCEL, SUSPEND, OR WITHDRAW THE 
ENJOYMENT OF FISCAL INCENTIVES OF CONCERNED 
REGISTERED BUSINESS ENTERPRISES FOR 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 
OR 
NON-SUBMISSION 
OF 
REQUIRED 
REPORTS, 
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;
“ (E) TO CANCEL, SUSPEND, OR WITHDRAW THE 
ENJOYMENT 
OF 
TAX 
SUBSIDY 
OF 
CONCERNED 
GOVERNMENT 
OWNED 
AND 
CONTROLLED 
CORPORATIONS, 
GOVERNMENT 
INSTRUMENTALITIES, 
GOVERNMENT 
COMMISSARIES, 
AND 
STATE 
UNIVERSITIES AND COLLEGES AND, WHEN NECESSARY, 
ENDORSE THE SAME TO THE CONCERNED REVENUE 
AGENCIES FOR ASSESSMENT AND COLLECTION OF 
TAXES 
AND 
DUTIES 
DUE, 
INCLUDING 
FINES 
OR 
PENALTIES, IF WARRANTED, FOR VIOLATIONS OF ANY 
OF THE CONDITIONS IMPOSED IN THE GRANT OF TAX 
SUBSIDY, OR PROVISIONS OF THIS ACT, OR APPLICABLE 
RULES;
“ (F) 
TO 
REQUIRE 
INVESTMENT 
PROMOTION 
AGENCIES 
AND 
OTHER 
GOVERNMENT 
AGENCIES
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INCENTIVES,
CONTROLLED
GOVERNMENT
GOVERNMENT
ADMINISTERING 
TAX 
INCENTIVES 
TO 
SUBMIT, 
REGULARLY OR WHEN REQUESTED, SUMMARIES OF 
APPROVED INVESTMENT AND INCENTIVES GRANTED, 
AND FIRM- OR ENTITY-LEVEL TAX INCENTIVES AND 
BENEFITS DATA AS INPUT TO THE FISCAL INCENTIVES 
REVIEW BOARD’S REVIEW AND AUDIT FUNCTION, AND 
EVALUATION OF PERFORMANCE OF RECIPIENTS OF TAX 
INCENTIVES;
“ (G) TO PUBLISH REGULARLY, PER INDUSTRY 
GROUP, THE DATA PERTAINING TO THE AMOUNT OF TAX 
INCENTIVES, TAX PAYMENTS, AND OTHER RELATED 
INFORMATION, INCLUDING BENEFITS DATA;
“ (H) TO OBTAIN INFORMATION, SUMMON, EXAMINE, 
INQUIRE AND RECEIVE FROM OTHER GOVERNMENT 
AGENCIES 
ADMINISTERING 
TAX 
GOVERNMENT 
OWNED 
AND 
CORPORATIONS 
(GOCCS),
INSTRUMENTALITIES 
(GIS),
COMMISSARIES, STATE UNIVERSITIES AND COLLEGES 
(SUCS), 
AND 
LOCAL 
GOVERNMENT 
UNITS 
(LGUS), 
DOCUMENTS, 
RECORDS, 
BOOKS, 
OR 
OTHER 
DATA 
RELEVANT OR MATERIAL TO THE RESOLUTION OF 
ISSUES ARISING FROM THE APPROVAL, DISAPPROVAL, 
CANCELLATION, 
SUSPENSION, 
WITHDRAWAL 
OR 
FORFEITURE 
OF 
TAX 
SUBSIDY, 
OR 
IN 
IMPOSING 
PENALTIES 
FOR VIOLATIONS 
OF THE TERMS AND 
CONDITIONS ON THE AVAILMENT OF TAX SUBSIDY, OR 
ANY OF THE PROVISIONS OF THIS ACT;
“(I) TO SUBMIT ANNUAL REPORTS TO THE OFFICE 
OF 
THE 
PRESIDENT, 
AS 
PART 
OF 
THE 
BUDGET 
PROCESS, COVERING ITS POLICY AND ACTIVITIES IN THE 
ADMINISTRATION 
OF 
THIS 
ACT, 
INCLUDING 
RECOMMENDATIONS ON TAX INCENTIVE POLICIES AND 
APPROVAL OF TAX INCENTIVES;
“(J) TO DECIDE ON ISSUES, AFTER DUE HEARING, 
CONCERNING 
THE 
APPROVAL, 
DISAPPROVAL, 
CANCELLATION, 
SUSPENSION, 
WITHDRAWAL, 
OR 
FORFEITURE OF TAX INCENTIVES OR TAX SUBSIDY IN 
ACCORDANCE WITH THIS ACT;
“(K) 
TO 
PROMULGATE 
SUCH 
RULES 
AND 
REGULATIONS AS MAY BE NECESSARY TO IMPLEMENT 
THE INTENT AND PROVISIONS OF THIS SECTION; AND
“ (L) 
TO 
EXERCISE 
ALL 
OTHER 
POWERS 
NECESSARY OR INCIDENTAL TO ATTAIN THE PURPOSES
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OF THIS ACT AND OTHER LAWS VESTING ADDITIONAL 
FUNCTIONS 
ON 
THE 
FISCAL 
INCENTIVES 
REVIEW 
BOARD.
SEC. 298. COMPOSITION OF THE FISCAL INCENTIVES 
REVIEW BOARD. -  THE FISCAL INCENTIVES REVIEW BOARD 
SHALL BE RECONSTITUTED AS FOLLOWS:
“BOARD PROPER:
SECRETARY OF FINANCE 
SECRETARY 
OF 
TRADE
“CHAIRPERSON 
“ CO-CHAIRPERSON - 
INDUSTRY 
“MEMBERS
AND
EXECUTIVE SECRETARY OF THE 
OFFICE OF THE PRESIDENT 
SECRETARY OF BUDGET AND 
MANAGEMENT 
DIRECTOR GENERAL OF THE 
NATIONAL ECONOMIC AND 
DEVELOPMENT AUTHORITY 
“TECHNICAL COMMITTEE:
“ CHAIRPERSON
“ MEMBERS
“SECRETARIAT
UNDERSECRETARY OF FINANCE 
UNDERSECRETARY OR ASSISTANT 
SECRETARY OF THE OFFICE OF THE 
EXECUTIVE SECRETARY 
UNDERSECRETARY OF TRADE AND 
INDUSTRY AND BOARD OF 
INVESTMENTS MANAGING HEAD OR 
ASSISTANT SECRETARY OF TRADE 
AND INDUSTRY
UNDERSECRETARY OR ASSISTANT 
SECRETARY OF BUDGET AND 
MANAGEMENT
DEPUTY OR ASSISTANT DIRECTOR 
GENERAL OF THE NATIONAL 
ECONOMIC AND DEVELOPMENT 
AUTHORITY
COMMISSIONER OR DEPUTY 
COMMISSIONER OF INTERNAL 
REVENUE
COMMISSIONER OR DEPUTY 
COMMISSIONER OF CUSTOMS 
THE 
SECRETARIAT 
SHALL 
BE 
HEADED 
BY 
AN 
ASSISTANT 
SECRETARY 
OF 
FINANCE 
AND 
SHALL 
BE 
STAFFED 
BY 
THE 
NATIONAL TAX RESEARCH CENTER
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“ SEC. 299. STRUCTURE AND STAFFING PATTERN. -  THE 
FISCAL INCENTIVES REVIEW BOARD SECRETARIAT SHALL 
DETERMINE ITS ORGANIZATIONAL STRUCTURE AND STAFFING 
PATTERN, AND CREATE SUCH SERVICES, DIVISIONS, AND 
UNITS, AS IT MAY REQUIRE OR DEEM NECESSARY, SUBJECT 
TO THE APPROVAL BY THE DEPARTMENT OF BUDGET AND 
MANAGEMENT.
CHAPTER IV
"QUALIFIED PROJECTS OR ACTIVITIES FOR TAX 
INCENTIVES
“SEC. 300. STRATEGIC INVESTMENT PRIORITY PLAN. -  
THE BOARD OF INVESTMENTS, IN COORDINATION WITH THE 
FISCAL 
INCENTIVES 
REVIEW 
BOARD, 
INVESTMENT 
PROMOTION 
AGENCIES, 
OTHER 
GOVERNMENT AGENCIES 
ADMINISTERING TAX INCENTIVES, AND THE PRIVATE SECTOR, 
SHALL FORMULATE THE STRATEGIC INVESTMENT PRIORITY 
PLAN TO BE SUBMITTED TO THE PRESIDENT FOR APPROVAL. 
THE PLAN SHALL BE VALID FOR A PERIOD OF THREE (3) 
YEARS SUBJECT TO REVIEW AND AMENDMENT AS THE NEED 
ARISES.
“THE STRATEGIC INVESTMENT PRIORITY PLAN SHALL 
CONTAIN THE FOLLOWING:
“(A) PRIORITY PROJECTS OR ACTIVITIES THAT ARE 
INCLUDED IN THE PHILIPPINE DEVELOPMENT PLAN OR 
ITS EQUIVALENT, OR OTHER GOVERNMENT PROGRAMS, 
TAKING INTO ACCOUNT ANY OF THE FOLLOWING:
“(1) 
SUBSTANTIAL 
AMOUNT 
OF 
INVESTMENTS;
“(2) 
CONSIDERABLE 
GENERATION 
OF 
EMPLOYMENT;
“(3) 
CONSIDERABLE 
AMOUNT 
OF 
NET 
EXPORTS;
(4) USE OF MODERN, ADVANCE, OR NEW 
TECHNOLOGY;
“(5) 
ADOPTION 
OF 
ADEQUATE 
ENVIRONMENTAL 
PROTECTION 
SYSTEMS 
AND 
SUSTAINABILITY STRATEGIES;
“(6) ADDRESSING MISSING GAPS IN THE 
SUPPLY OR VALUE CHAIN OR OTHERWISE MOVING 
UP THE VALUE CHAIN OR PRODUCT LADDER; OR
“(7) 
PROMOTION 
OF 
MARKET 
COMPETITIVENESS.
(B) SCOPE AND COVERAGE OF LOCATION AND 
INDUSTRY TIERS IN SECTION 296;
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■(C) TERMS AND CONDITIONS ON THE GRANT OF 
ENHANCED 
DEDUCTIONS 
UNDER 
SECTION 
294 (C), 
INCLUDING THE APPROPRIATE LEVEL OF PERCENTAGE 
OF DEDUCTIONS; AND
“ (D) 
SERVICES 
AND 
ACTIVITIES 
THAT 
CAN 
PROMOTE REGIONAL AND GLOBAL OPERATIONS IN THE 
COUNTRY.
“ ALL SECTORS OR INDUSTRIES THAT MAY BE INCLUDED 
IN THE STRATEGIC 
INVESTMENT PRIORITY PLAN 
SHALL 
UNDERGO AN EVALUATION PROCESS 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 UNLESS IT IS 
SUPPORTED 
BY A 
FORMAL 
EVALUATION 
PROCESS 
OR 
REPORT.
THE PROJECTS OR ACTIVITIES MUST COMPLY WITH THE 
SPECIFIC QUALIFICATION REQUIREMENTS OR CONDITIONS 
FOR A PARTICULAR SECTOR OR INDUSTRY AND OTHER 
LIMITATIONS AS SET AND DETERMINED BY THE BOARD OF 
INVESTMENTS, AND IN COORDINATION WITH THE FISCAL 
INCENTIVES REVIEW BOARD.
“ IN NO CASE SHALL THE INVESTMENT PROMOTION 
AGENCIES ACCEPT APPLICATIONS UNLESS THE PROJECT OR 
ACTIVITY IS LISTED IN THE STRATEGIC INVESTMENT PRIORITY 
PLAN. 
PROJECTS 
OR ACTIVITIES 
NOT LISTED IN THE 
STRATEGIC 
INVESTMENT 
PRIORITY 
PLAN 
SHALL 
BE 
AUTOMATICALLY DISAPPROVED.
SEC. 301. POWER OF THE PRESIDENT TO GRANT 
INCENTIVES 
-  
NOTWITHSTANDING 
THE 
PROVISIONS 
OF 
SECTIONS 295 AND 296, THE PRESIDENT MAY, 
IN THE 
INTEREST OF NATIONAL ECONOMIC DEVELOPMENT AND UPON 
THE RECOMMENDATION OF THE FISCAL INCENTIVES REVIEW 
BOARD, MODIFY THE PERIOD OR MANNER OF AVAILMENT OF 
INCENTIVES PROVIDED UNDER THIS CODE FOR ANY HIGHLY 
DESIRABLE PROJECT: PROVIDED, THAT THE TOTAL PERIOD 
OF INCENTIVE AVAILMENT SHALL NOT EXCEED FORTY (40) 
YEARS.
“ IN DETERMINING IF A PROJECT OR ACTIVITY IS A 
HIGHLY 
DESIRABLE 
PROJECT, 
THE 
FISCAL 
INCENTIVES 
REVIEW BOARD SHALL DETERMINE WHETHER THE BENEFITS 
THAT 
THE 
GOVERNMENT 
MAY 
DERIVE 
FROM 
SUCH 
INVESTMENT 
ARE 
CLEAR 
AND 
CONVINCING 
AND 
FAR
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OUTWEIGH 
THE 
COST 
OF 
INCENTIVES 
THAT 
WILL 
BE 
GRANTED.
'IN RECOMMENDING THE MODIFIED PERIOD OR MANNER 
OF AVAILMENT OF INCENTIVES, THE FISCAL INCENTIVES 
REVIEW BOARD SHALL CONSIDER THE FOLLOWING;
“(1) 
THE 
PROJECT 
HAS 
A 
COMPREHENSIVE 
SUSTAINABLE 
DEVELOPMENT 
PLAN 
WITH 
CLEAR 
INCLUSIVE BUSINESS APPROACHES AND INNOVATIONS; 
AND
(2) MINIMUM PAID UP CAPITAL OF ONE BILLION US 
DOLLARS (USD 1,000,000,000) 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 PROJECTED IMPACT 
ON 
THE 
ECONOMY 
AND 
AGREED 
PERFORMANCE 
TARGETS ARE NOT MET BY THE PROJECT, THE FISCAL 
INCENTIVES REVIEW BOARD SHALL RECOMMEND TO 
THE PRESIDENT THE CANCELLATION OF THE MODIFIED 
PERIOD OR MANNER OF AVAILMENT OF INCENTIVES. 
“SEC. 
302. 
AMENDMENTS 
TO 
THE 
STRATEGIC 
INVESTMENT PRIORITY PLAN. -  SUBJECT TO PUBLICATION 
REQUIREMENTS 
AND 
THE 
CRITERIA 
FOR 
INVESTMENT 
PRIORITY DETERMINATION, THE BOARD OF INVESTMENTS 
MAY, AT ANY TIME, INCLUDE ADDITIONAL AREAS IN THE 
STRATEGIC INVESTMENT PRIORITY PLAN, ALTER ANY OF THE 
TERMS OF THE DECLARATION OF AN INVESTMENT AREA, AND 
TEMPORARILY SUSPEND PROJECTS OR ACTIVITIES ON THE 
STRATEGIC INVESTMENT PRIORITY PLAN IF IT CONSIDERS 
THAT SUCH PROJECT OR ACTIVITY IS NO LONGER A PRIORITY 
WITHIN THE EFFECTIVITY OF THE STRATEGIC INVESTMENT 
PRIORITY PLAN.
“SEC. 303. PUBLICATION. 
-  UPON APPROVAL OF THE 
PLAN, IN WHOLE OR IN PART, OR UPON APPROVAL OF AN 
AMENDMENT THEREOF, THE PLAN OR THE AMENDMENT, 
SPECIFYING AND DECLARING THE AREAS OF INVESTMENTS 
SHALL BE PUBLISHED IN AT LEAST ONE (1) NEWSPAPER OF 
GENERAL 
CIRCULATION 
OR 
THE 
OFFICIAL 
GAZETTE; 
PROVIDED, 
THAT ALL 
SUCH 
AREAS 
IN 
THE 
EXISTING
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STRATEGIC INVESTMENT PRIORITY PLAN SHALL BE OPEN FOR 
APPLICATION UNTIL PUBLICATION OF AN AMENDMENT OR 
DELETION THEREOF.
“SEC. 
304. 
QUALIFICATIONS 
OF 
A 
REGISTERED 
BUSINESS ENTERPRISES FOR TAX INCENTIVES. 
-  IN THE 
REVIEW AND GRANT OF TAX INCENTIVES BY THE FISCAL 
INCENTIVES REVIEW BOARD, THE REGISTERED BUSINESS 
ENTERPRISE MUST:
“(A) BE ENGAGED IN A PROJECT OR ACTIVITY 
INCLUDED IN THE STRATEGIC INVESTMENT PRIORITY 
PLAN;
“ (B) MEET THE TARGET PERFORMANCE METRICS 
AFTER THE AGREED TIME PERIOD;
(C) INSTALL AN ADEQUATE ACCOUNTING SYSTEM 
THAT SHALL IDENTIFY THE INVESTMENTS, REVENUES, 
COSTS AND PROFITS OR LOSSES OF EACH REGISTERED 
PROJECT 
OR 
ACTIVITY 
UNDERTAKEN 
BY 
THE 
ENTERPRISE 
SEPARATELY 
FROM 
THE 
AGGREGATE 
INVESTMENTS, REVENUES, COSTS AND PROFITS OR 
LOSSES OF THE WHOLE ENTERPRISE; OR ESTABLISH A 
SEPARATE 
CORPORATION 
FOR 
EACH 
REGISTERED 
PROJECT OR ACTIVITY IF THE INVESTMENT PROMOTION 
AGENCY SHOULD SO REQUIRE;
“(D) COMPLY WITH THE E-RECEIPTING AND E- 
SALES REQUIREMENT IN ACCORDANCE WITH SECTIONS 
237 AND 237-A OF THIS CODE; AND
“ (E) SUBMIT ANNUALLY REPORTS OF OWNERSHIP 
OF THE ORGANIZATION AND RELATED PARTIES.
“ CHAPTER V
“ TAX INCENTIVES MANAGEMENT AND 
TRANSPARENCY”
“SEC. 305. FILING OF TAX RETURNS AND SUBMISSION 
OF TAX INCENTIVES REPORTS. — ALL REGISTERED BUSINESS 
ENTERPRISES AND OTHER REGISTERED ENTITIES WHETHER 
TAXABLE OR EXEMPT, ARE REQUIRED TO FILE THEIR TAX 
RETURNS AND PAY THEIR TAX LIABILITIES, ON OR BEFORE 
THE DEADLINE AS PROVIDED UNDER THE NIRC, AS AMENDED, 
USING THE ELECTRONIC SYSTEM FOR FILING AND PAYMENT 
OF TAXES WITH THE BUREAU OF 
INTERNAL REVENUE: 
PROVIDED, THAT, FOR PURPOSES OF COMPLYING WITH THEIR 
TAX OBLIGATIONS, COOPERATIVES AND OTHER REGISTERED 
ENTITIES WHICH DO NOT HAVE ACCESS TO THE ELECTRONIC 
FACILITIES SHALL FILE WITH THEIR RESPECTIVE REVENUE 
DISTRICT OFFICES.
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“ FOR REGISTERED BUSINESS ENTERPRISES AND OTHER 
REGISTERED ENTERPRISES AVAILING OF TAX INCENTIVES 
ADMINISTERED BY THE INVESTMENT PROMOTION AGENCIES 
AND OTHER GOVERNMENT AGENCIES ADMINISTERING TAX 
INCENTIVES, THEY SHALL FILE WITH THEIR RESPECTIVE 
INVESTMENT PROMOTION AGENCIES OR OTHER GOVERNMENT 
AGENCIES ADMINISTERING TAX INCENTIVES A COMPLETE 
ANNUAL TAX INCENTIVES REPORT OF THEIR INCOME-BASED 
TAX INCENTIVES, VALUE-ADDED TAX EXEMPTIONS AND ZERO­
RATING, CUSTOMS DUTY EXEMPTIONS, DEDUCTIONS, CREDITS 
OR 
EXCLUSIONS 
FROM 
THE 
INCOME 
TAX 
BASE, 
AND 
EXEMPTIONS FROM LOCAL TAXES, AS PROVIDED IN THE 
SPECIAL LAWS OF THE CONCERNED INVESTMENT PROMOTION 
AGENCY OR OTHER GOVERNMENT AGENCY ADMINISTERING 
TAX INCENTIVES, AND RESPECTIVE LAWS, AND A COMPLETE 
ANNUAL BENEFITS REPORT WHICH SHALL INCLUDE DATA 
SUCH AS BUT NOT LIMITED TO THE APPROVED AND ACTUAL 
AMOUNT 
OF 
INVESTMENTS, 
APPROVED 
AND 
ACTUAL 
EMPLOYMENT LEVEL AND JOB CREATION, APPROVED AND 
ACTUAL EXPORTS AND IMPORTS, DOMESTIC PURCHASES, 
PROFITS AND DIVIDEND PAYOUT, ALL TAXES PAID, WITHHELD 
AND FOREGONE WITHIN THIRTY (30) CALENDAR DAYS FROM 
THE STATUTORY DEADLINE FOR FILING OF TAX RETURNS AND 
PAYMENT OF TAXES; PROVIDED, THAT, A COPY OF THE 
REPORT SHALL BE SIMULTANEOUSLY SUBMITTED TO THE 
FISCAL INCENTIVES REVIEW BOARD IN ELECTRONIC FORM.
“THE INVESTMENT PROMOTION AGENCIES AND OTHER 
GOVERNMENT AGENCIES ADMINISTERING TAX INCENTIVES 
SHALL, WITHIN SIXTY (60) CALENDAR DAYS FROM THE END OF 
THE STATUTORY DEADLINE FOR FILING OF THE RELEVANT 
TAX RETURNS, SUBMIT TO THE BUREAU 
OF 
INTERNAL 
REVENUE, 
THEIR 
RESPECTIVE ANNUAL TAX 
INCENTIVES 
REPORTS BASED ON THE LIST OF THE REGISTERED BUSINESS 
ENTERPRISES AND OTHER REGISTERED ENTERPRISES WHICH 
HAVE FILED SAID TAX INCENTIVES REPORT.
“THE DETAILS OF THE TAX INCENTIVES REPORTS, AS 
PROVIDED IN THE PRECEDING PARAGRAPHS, SHALL BE 
PROVIDED IN THE IMPLEMENTING RULES AND REGULATIONS 
OF THIS ACT.
“THE FOREGOING PROVISIONS SHALL BE WITHOUT 
PREJUDICE TO THE RIGHT OF THE BUREAU OF INTERNAL 
REVENUE AND THE BUREAU OF CUSTOMS TO ASSESS AND/OR 
AUDIT TAX LIABILITIES, IF ANY, WITHIN THE PRESCRIBED 
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CUSTOMS MODERNIZATION AND TARIFF ACT (CMTA), AS 
AMENDED, RESPECTIVELY.
“ SEC. 306. MONITORING, EVALUATION, AND REPORTING 
OF TAX INCENTIVES. — NOTWITHSTANDING ANY LAW TO THE 
CONTRARY, THE BUREAU OF INTERNAL REVENUE AND THE 
BUREAU OF CUSTOMS SHALL SUBMIT TO THE DEPARTMENT 
OF 
FINANCE: 
(A) 
ALL TAX 
AND 
DUTY 
INCENTIVES 
OF 
REGISTERED 
BUSINESS 
ENTERPRISES 
AND 
OTHER 
REGISTERED ENTERPRISES, AS REFLECTED IN THEIR FILED 
TAX RETURNS AND IMPORT ENTRIES; AND (B) ACTUAL TAX 
AND DUTY INCENTIVES AS EVALUATED AND DETERMINED BY 
THE BUREAU OF INTERNAL REVENUE AND THE BUREAU OF 
CUSTOMS.
“THE DEPARTMENT OF FINANCE SHALL MAINTAIN A 
SINGLE DATABASE FOR MONITORING AND ANALYSIS OF TAX 
INCENTIVES GRANTED.
“THE FISCAL INCENTIVES REVIEW BOARD IS MANDATED 
TO 
SYSTEMATICALLY 
COLLECT 
AND 
STORE 
ALL 
TAX 
INCENTIVES AND BENEFIT DATA FROM THE DEPARTMENT OF 
FINANCE, 
INVESTMENT 
PROMOTION 
AGENCIES, 
OTHER 
GOVERNMENT AGENCIES ADMINISTERING TAX INCENTIVES, 
REGISTERED 
BUSINESS 
ENTERPRISES, 
AND 
OTHER 
REGISTERED ENTERPRISES, AS WELL AS TO EVALUATE AND 
ASSESS 
THE 
PROCESS, 
OUTCOMES, 
AND 
IMPACT 
OF 
INCENTIVES GRANTED TO FIRMS TO DETERMINE WHETHER 
AGREED PERFORMANCE TARGETS AND INTENDED RESULTS 
AND OUTCOMES ARE MET. THE METHOD OF EVALUATION MAY 
INCLUDE THE CONDUCT OF COST-BENEFIT ANALYSIS OR 
OTHER 
PROCESS 
AND 
IMPACT 
EVALUATION 
METHODS: 
PROVIDED, THAT FOR PURPOSES OF THIS ACT, THE TERM 
COST-BENEFITS ANALYSIS 
REFERS TO THE SYSTEMATIC 
EVALUATION OF THE TOTAL COSTS OF GRANTING TAX 
INCENTIVES VIS-A-VIS THE TOTAL BENEFITS DERIVED FROM 
THE GRANT OF TAX INCENTIVES BASED ON THE ANNUAL TAX 
INCENTIVE REPORT, ANNUAL BENEFITS REPORT, AND OTHER 
RELATED SOURCES, TO CALCULATE THE NET BENEFIT OR 
COST ASSOCIATED WITH TAX INCENTIVES.
“ FOR PURPOSES OF MONITORING AND TRANSPARENCY, 
THE DEPARTMENT OF FINANCE SHALL SUBMIT TO THE 
DEPARTMENT OF BUDGET AND MANAGEMENT AGGREGATE 
DATA ON A SECTORAL AND PER INDUSTRY BASIS OF: (1) THE 
AMOUNT OF TAX INCENTIVES AVAILED OF BY REGISTERED 
BUSINESS 
ENTERPRISES 
AND 
OTHER 
REGISTERED 
ENTERPRISES; (2) THE ESTIMATE CLAIMS OF TAX INCENTIVES
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IMMEDIATELY PRECEDING THE CURRENT YEAR; 
(3) THE 
PROGRAMMED TAX INCENTIVES FOR THE CURRENT YEAR; 
AND 
(4) 
THE 
PROJECTED 
TAX 
INCENTIVES 
FOR 
THE 
FOLLOWING YEAR.
“THE AFORESAID DATA SHALL BE REFLECTED BY THE 
DBM IN THE ANNUAL BUDGET OF 
EXPENDITURES AND 
SOURCES OF FINANCING (BESF), WHICH SHALL BE KNOWN AS 
THE TAX INCENTIVES INFORMATION (Til) SECTION: PROVIDED, 
THAT THE TAX INCENTIVES INFORMATION SHALL BE LIMITED 
TO THE AGGREGATE DATA RELATED TO INCENTIVES AVAILED 
OF BY REGISTERED BUSINESS ENTERPRISES AND OTHER 
REGISTERED ENTERPRISES BASED ON THE SUBMISSIONS OF 
THE 
DEPARTMENT 
OF 
FINANCE 
AND 
THE 
CONCERNED 
INVESTMENT 
PROMOTION 
AGENCIES 
AND 
OTHER 
GOVERNMENT AGENCIES ADMINISTERING TAX INCENTIVES, 
CATEGORIZED BY SECTOR, 
BY INVESTMENT PROMOTION 
AGENCY OR OTHER GOVERNMENT AGENCY ADMINISTERING 
TAX INCENTIVES, AND BY TYPE OF TAX INCENTIVE. PROVIDED 
FURTHER, 
THAT 
THE 
RESULTS 
OF 
THE 
COST-BENEFIT 
ANALYSIS SHALL BE PUBLISHED AT THE INDUSTRY-LEVEL BY 
THE FISCAL INCENTIVES REVIEW BOARD AND A REPORT 
SHALL BE SUBMITTED TO THE PRESIDENT AND CONGRESS ON 
AN ANNUAL BASIS.
“ SEC. 307. CONDUCT OF COST-BENEFIT ANALYSIS ON 
TAX INCENTIVES. -  THE FISCAL INCENTIVES REVIEW BOARD IS 
MANDATED TO CONDUCT COST-BENEFIT ANALYSIS ON THE 
INVESTMENT 
AND 
NON-INVESTMENT 
INCENTIVES 
TO 
DETERMINE 
THE 
IMPACT 
OF 
TAX 
INCENTIVES 
ON 
THE 
PHILIPPINE ECONOMY AND ON THE RELEVANT SECTOR.
“ FOR THIS PURPOSE, ALL HEADS OF THE INVESTMENT 
PROMOTION AGENCIES AND OTHER GOVERNMENT AGENCIES 
ADMINISTERING TAX INCENTIVES SHALL SUBMIT TO THE 
FISCAL 
INCENTIVES 
REVIEW 
BOARD 
FIRM- 
AND 
PER 
REGISTERED PROJECT- OR ACTIVITY-LEVEL:
(1) DATA ON TAX INCENTIVES BASED ON THE 
SUBMISSIONS OF REGISTERED BUSINESS ENTERPRISES 
AND OTHER REGISTERED ENTERPRISES; AND
(2) OTHER INVESTMENT- AND NON-INVESTMENT- 
RELATED DATA.
“ SEC. 308. PENALTIES FOR NONCOMPLIANCE WITH 
FILING 
AND 
REPORTORIAL 
REQUIREMENTS. 
— 
ANY 
REGISTERED BUSINESS ENTERPRISE OR OTHER REGISTERED 
ENTERPRISE WHICH FAILS TO COMPLY WITH FILING AND 
REPORTORIAL 
REQUIREMENTS 
WITH 
THE 
APPROPRIATE
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INVESTMENT PROMOTION AGENCIES OR OTHER GOVERNMENT 
AGENCIES ADMINISTERING TAX INCENTIVES AND/OR WHICH 
FAILS TO SHOW PROOF OF FILING OF TAX RETURNS USING 
THE ELECTRONIC SYSTEM FOR FILING AND PAYMENT OF 
TAXES OF THE BUREAU OF INTERNAL REVENUE UNDER 
SECTION 305 HEREOF, SHALL BE IMPOSED THE FOLLOWING 
PENALTIES BY THE APPROPRIATE INVESTMENT PROMOTION 
AGENCY OR OTHER GOVERNMENT AGENCY ADMINISTERING 
TAX INCENTIVES:
“ (A) 
FIRST VIOLATION -  PAYMENT OF A FINE 
AMOUNTING TO ONE 
HUNDRED THOUSAND PESOS 
(P100,000.00);
“ (B) 
SECOND VIOLATION -  PAYMENT OF A FINE 
AMOUNTING TO FIVE HUNDRED THOUSAND PESOS 
(P500,000.00); AND
“ (C) 
THIRD VIOLATION -  CANCELLATION BY THE 
FISCAL 
INCENTIVES 
REVIEW 
BOARD 
OF 
THE 
REGISTRATION 
OF 
THE 
REGISTERED 
BUSINESS 
ENTERPRISE 
OR 
REGISTERED 
ENTITY 
WITH 
THE 
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 AND/OR OTHER 
TAX INCENTIVES AVAILMENT: 
PROVIDED, FURTHER THAT 
COLLECTIONS FROM THE PENALTIES SHALL ACCRUE TO THE 
GENERAL FUND.
“ 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 15 AND 16 
OF THIS ACT SHALL 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.
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“CHAPTER VI”
“TRANSITORY AND MISCELLANEOUS PROVISIONS' 
“SEC. 309. NO DOUBLE REGISTRATION OF ENTERPRISES. 
-  REGISTERED ENTERPRISES SHALL NOT BE ALLOWED TO 
REGISTER 
THEIR 
ACTIVITIES 
IN 
MORE 
THAN 
ONE 
(1) 
INVESTMENT 
PROMOTION 
AGENCY: 
PROVIDED, 
THAT,
REGISTERED BUSINESS ENTERPRISES RENDERING AUXILIARY 
PROJECTS OR ACTIVITIES MAY BE ALLOWED TO REGISTER IN 
MORE THAN ONE INVESTMENT PROMOTION AGENCY SUBJECT 
TO THE APPROVAL OF THE FISCAL INCENTIVES REVIEW 
BOARD.
SEC. 
310. 
GOVERNANCE 
RULES. 
-  
THE 
FISCAL 
INCENTIVES 
REVIEW 
BOARD 
MAY 
REQUIRE 
DOMESTIC 
REGISTERED ENTERPRISES TO LIST THEIR SHARES OF STOCK 
IN ANY ACCREDITED STOCK EXCHANGE OR DIRECTLY OFFER 
A PORTION OF THEIR CAPITAL STOCK TO THE PUBLIC AND/OR 
THEIR EMPLOYEES WITHIN FIVE (5) YEARS FROM DATE OF 
REGISTRATION.
SEC. 311. INVESTMENTS PRIOR TO THE EFFECTIVITY OF 
THIS ACT. -  REGISTERED BUSINESS ENTERPRISES WITH 
INCENTIVES GRANTED PRIOR TO THE EFFECTIVITY OF THIS 
ACT SHALL BE SUBJECT TO THE FOLLOWING RULES:
“ (A) REGISTERED BUSINESS ENTERPRISES WHOSE 
PROJECTS OR ACTIVITIES WERE GRANTED ONLY AN 
INCOME TAX HOLIDAY PRIOR TO THE EFFECTIVITY OF 
THIS ACT SHALL BE ALLOWED TO CONTINUE WITH THE 
AVAILMENT OF THE INCOME TAX HOLIDAY FOR THE 
REMAINING PERIOD OF THE INCOME TAX HOLIDAY AS 
SPECIFIED IN THE TERMS AND CONDITIONS OF THEIR 
REGISTRATION; PROVIDED, THAT FOR THOSE THAT 
HAVE BEEN GRANTED THE INCOME TAX HOLIDAY BUT 
HAVE NOT YET AVAILED OF THE INCENTIVE UPON THE 
EFFECTIVITY OF THIS ACT, THEY MAY USE THE INCOME 
TAX HOLIDAY FOR THE 
PERIOD SPECIFIED IN THE 
TERMS AND CONDITION OF THEIR REGISTRATION.
“ (B) REGISTERED BUSINESS ENTERPRISES WHOSE 
PROJECTS OR ACTIVITIES WERE GRANTED AN INCOME 
TAX HOLIDAY PRIOR TO THE EFFECTIVITY OF THIS ACT 
AND THAT WILL EXPIRE WITHIN FIVE YEARS FROM THE 
EFFECTIVITY OF THIS ACT AND THAT ARE ENTITLED TO 
THE FIVE PERCENT (5%) TAX ON GROSS 
INCOME 
EARNED INCENTIVE AFTER THE INCOME TAX HOLIDAY 
SHALL BE ALLOWED TO AVAIL OF THE FIVE PERCENT 
(5%) GROSS INCOME EARNED INCENTIVE FOR THE
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REMAINING PERIOD AFTER THE INCOME TAX HOLIDAY 
NOT TO EXCEED FIVE (5) YEARS FROM THE EFFECTIVITY 
OF THIS ACT.
“ (C) 
REGISTERED 
BUSINESS 
ENTERPRISES 
CURRENTLY AVAILING OF THE FIVE (5%) PERCENT TAX 
ON GROSS INCOME EARNED GRANTED PRIOR TO THE 
EFFECTIVITY OF THIS ACT SHALL BE ALLOWED TO 
CONTINUE AVAILING THE SAID TAX INCENTIVE AT THE 
RATE OF FIVE PERCENT (5%) IN 2020 AND THEREAFTER, 
FOLLOWING THE SCHEDULE:
“ (1) TWO (2) YEARS FOR PROJECTS OR 
ACTIVITIES AVAILING OF THE GROSS INCOME 
EARNED INCENTIVE FOR MORE THAN TEN (10) 
YEARS;
“ (2) THREE (3) YEARS FOR PROJECTS OR 
ACTIVITIES AVAILING OF THE GROSS INCOME 
EARNED INCENTIVE BETWEEN FIVE (5) AND TEN
(10) YEARS;
“ (3) FIVE (5) YEARS FOR PROJECTS OR 
ACTIVITIES AVAILING OF THE GROSS INCOME 
EARNED INCENTIVE BELOW FIVE (5) YEARS; AND 
“ (4) SEVEN (7) YEARS FOR PROJECTS OR 
ACTIVITIES WHICH WILL SATISFY ANY OF THE 
FOLLOWING 
CONDITIONS: 
(i) 
REGISTERED
EXPORTERS 
THAT 
EXPORT 
ONE 
HUNDRED 
PERCENT (100%) OF THEIR GOODS AND SERVICES;
(11) REGISTERED BUSINESS ENTERPRISES THAT 
EMPLOY 
AT 
LEAST 
TEN 
THOUSAND 
(10,000) 
FILIPINO EMPLOYEES DIRECTLY ENGAGED IN THE 
PRODUCTION OF THE REGISTERED PROJECT OR 
ACTIVITY PRIOR TO THE EFFECTIVITY OF THIS ACT; 
OR (iii) REGISTERED ENTERPRISES ENGAGED IN 
FOOTLOOSE 
PROJECTS 
OR 
ACTIVITIES 
AS 
DEFINED HEREIN.
“EXISTING 
REGISTERED 
PROJECTS 
OR 
ACTIVITIES 
WHICH 
WILL 
QUALIFY 
FOR 
REGISTRATION 
UNDER 
THE 
STRATEGIC INVESTMENT PRIORITY PLAN MAY OPT TO BE 
GOVERNED BY THE PROVISIONS OF THIS ACT; IN SUCH CASE, 
THE SAID ENTERPRISES SHALL BE REQUIRED TO SURRENDER 
THEIR CERTIFICATES OF REGISTRATION WHICH SHALL BE 
DEEMED AS AN EXPRESS WAIVER OF PRIVILEGE TO AVAIL OF 
INCENTIVES PROVIDED IN THE INCENTIVES LAW UNDER WHICH 
THEY WERE PREVIOUSLY REGISTERED.
36


1 
“ FOR PURPOSES OF THIS SECTION, A FOOTLOOSE
2 
PROJECT OR ACTIVITY SHALL MEET ALL OF THE FOLLOWING
3 
QUALIFICATIONS: (1) IT IS A MANUFACTURING ACTIVITY OR
4 
PROJECT; (2) IT HAS A DIRECT LABOR EXPENSE TO ASSET
5 
RATIO OF AT LEAST SEVENTY PERCENT (70%) FOR THREE
6 
CONSECUTIVE YEARS IMMEDIATELY PRECEDING THE YEAR OF
7 
IMPLEMENTATION OF THIS ACT; (3) IT EXPORTS ONE HUNDRED
8 
PERCENT (100%) OF ITS MANUFACTURED GOODS; AND (4) ITS
9 
ACTUAL AREA OF OPERATION IS OUTSIDE METRO MANILA:
10 
PROVIDED, THAT, THE FISCAL INCENTIVES REVIEW BOARD
11 
MAY MODIFY THE DIRECT LABOR EXPENSE TO ASSET RATIO
12 
OR THE MANUFACTURING EXPORT REQUIREMENTS, UPON THE
13 
RECOMMENDATION 
OF THE BOARD 
OF INVESTMENTS,
14 
CONSISTENT WITH 
THE STRATEGIC INVESTMENT 
PRIORITY
15 
PLAN.”
16
17 
SEC. 10-A. Repealing Clause. -  The following laws, decrees, executive
18 
orders, rules and regulations are hereby repealed:
19 
(A) To transfer to the Fiscal Incentives Review Board the power of the
20 
Investment Promotion Agency Board to review, approve, or disapprove fiscal
21 
incentives and to mandate the Investment Promotion Agency Board to recommend
22 
to the Fiscal Incentives Review Board after a thorough review of the application, the
23 
approval or disapproval of the same, the following provisions are hereby repealed:
24 
(1) Articles 7(3)(8) and (14) of Executive Order No. 226, series of 1987,
25 
entitled “the Omnibus Investments Code of 1987”, as amended by RA 7918,
26 
entitled “An Act Amending Article 39, Title III of Executive Order No. 226,
27 
series of 1987, entitled, ‘the Omnibus Investment Code of 1987, as Amended,
28 
and for Other Purposes";
29 
(2) Section 1 of Executive Order No. 458, series of 1991, entitled
30 
“Devolving the Powers and Functions of the Board of Investments Over
31 
Investments Within the Autonomous Region in Muslim Mindanao to the
32 
Autonomous Regional Government and for Other Purposes”;
33 
(3) Sections 7 and 8 of Republic Act 9400, entitled “An Act Amending
34 
Republic Act No. 7227, as amended. Otherwise Known as the Bases
35 
Conversion and Development Act of 1992, and for Other Purposes”;
36 
(4) Section 85(a) of Subchapter IV-B of RA 9593, entitled “An Act
37 
Declaring a National Policy for Tourism as an Engine of Investment,
38 
Employment, Growth and National Development and Strengthening the
39 
Department of Tourism and its Attached Agencies to Effectively Implement
40 
that Policy, and Appropriating Funds Therefor”, as amended by Republic Act
41 
No. 11262;
42 
(5) Sections 7 and 8 of Republic Act No. 9490, entitled “An Act
43 
Establishing the Aurora Special Economic Zone in the Province of Aurora,
44 
Creating for the Purpose the Aurora Special Economic Zone Authority,
37


1 
Appropriating Funds Therefor and for Other Purposes”, as amended by
2 
Republic Act No, 10083, entitled “An Act Amending Republic Act No. 9490,
3 
Otherwise Known as the 'Aurora Special Economic Zone Act of 2007”;
4 
(6) Section 13(i) of RA 7916, “An Act Providing for the Legal
5 
Framework and Mechanisms for the Creation, Operation, Administration and
6 
Coordination of Special Economic Zones in the Philippines, Creating for this
7 
Purpose, the Philippine Economic Zone Authority and for Other Purposes, as
8 
amended by RA 8748 entitled; and
9 
(B) The provisions of the following laws, including the tax incentives, that are
10 
inconsistent with this Act are hereby repealed:
11 
(1) Book I, Title III, Article 39(A), (B), (C), (D), (E), (I), (J), (K), (M) and
12 
(N); Title IV, Article 40; Book III, Articles 61,62, 63, 64, 65, 66, and 67; Book
13 
IV Article 69; Book VI, Articles 77 and 78 of Executive Order No. 226, series
14 
of 1987, entitled “The Omnibus Investments Code of 1987”, as amended by
15 
Republic Act No. 7918, and further amended by Republic Act No. 8756";
16 
(2) Executive Order No. 85, series of 2019, entitled “Reducing the
17 
Rates of Duty on Capital Equipment, Spare Parts and Accessories Imported
18 
by Board of Investments - Registered New and Expanding Enterprises”;
19 
(3) Section 17 (1) and (2), and Section 18(a), (b), (c), and (f) of
20 
Presidential Decree No. 66, entitled “Creating the Export Processing Zone
21 
Authority and Revising Republic Act No. 5490”;
22 
(4) Section 4(e) and (f) of Republic Act No. 7903, entitled “An Act
23 
Creating Special Economic Zone and Freeport in the City of Zamboanga and
24 
Establishing for this Purpose the Zamboanga City Special Economic Zone
25 
Authority, Appropriating Funds Therefor, and for Other Purposes”;
26 
(5) Section 4(b) and (c) of Republic Act No. 7922, entitled “An Act
27 
Establishing a Special Economic Zone and Freeport in the Municipality of
28 
Santa Ana and the Neighboring Islands in the Municipality of Aparri, Province
29 
of Cagayan Providing Funds Therefor, and for Other Purposes”;
30 
(6) Section 23 of Republic Act No. 7916, entitled “An Act Providing for
31 
the Legal Framework and Mechanisms for the Creation, Operation,
32 
Administration, and Coordination of Special Economic Zones in the
33 
Philippines, Creating for the Purpose the Philippine Economic Zone Authority
34 
(PEZA), and for Other Purposes” as amended by Republic Act No. 8748”;
35 
(7) Sections 4(f), 5 and 9 of Republic Act No. 9490, entitled “An Act
36 
Establishing the Aurora Special Economic Zone in the Province of Aurora,
37 
Creating for the Purpose the Aurora Special Economic Zone Authority,
38 
Appropriating Funds Therefor and for Other Purposes”, as amended by RA
39 
1 0083;
40 
(8) Sections 4(f), 5, 9 and 10 of Republic Act No. 9728, entitled “An Act
41 
Converting the Bataan Economic Zone Located in the Municipality of
42 
Mariveles, Province of Bataan, into the Freeport Area of Bataan (FAB),
43 
Creating for this Purpose the Authority of the Freeport Area of Bataan
44 
(AFAB), Appropriating Funds Therefor and for Other Purposes”;
38


1 
(9) Section 16 of Republic Act No. 7844, entitled “An Act to Develop
2 
Exports as a Key Towards the Achievement of the National Goals Towards
3 
the Year 2000”;
4 
(10) Sections 86(a),(c),(d),(e),(f), 88, and 95(a) and (b) of Republic Act
5 
No. 9593, entitled “An Act Declaring a National Policy for Tourism as an
6 
Engine of Investment, Employment, Growth and National Development, and
7 
Strengthening the Department of Tourism and its Attached Agencies to
8 
Effectively and Efficiently Implement That Policy, and Appropriating Funds
9 
Therefor”;
10 
(11) Section 9 of Presidential Decree No. 538, entitled “Creating and
11 
Establishing the PHIVIDEC Industrial Authority and Making it a Subsidiary
12 
Agency of the Philippine Veterans Development Corporation, Defining its
13 
Powers, Functions and Responsibilities, and for Other Purposes” as amended
14 
by Presidential Decree No. 1491;
15 
(12) Section 1 (G) of Executive Order No. 458, series of 1991, entitled
16 
“Devolving the Powers and Functions of the Board of Investments Over
17 
Investments Within the Autonomous Region in Muslim Mindanao to the
18 
Autonomous Regional Government and for Other Purposes”;
19 
(13) Presidential Decree No. 1955, entitled “Withdrawing, Subject to
20 
Certain Conditions, the Duty and Tax Privileges Granted to Private Business
21 
Enterprises and/or Persons Engaged in Any Economic Activity and for Other
22 
Purposes".
23 
(C) To expand the powers and functions of the Fiscal Incentives Review
24 
Board and enhance its membership, the provisions of the following laws that are
25 
inconsistent with this Act are hereby repealed:
26 
(1) Sections 1(6) and 2 of Presidential Decree No. 776, entitled
27 
“Repealing All Laws, Acts, Decrees, Orders and Ordinances, Granting
28 
Exemptions from Taxes, Duties, Fees, Imposts and Other Charges Under
29 
Certain Exceptions and Creating a Fiscal Incentives Board”;
30 
(2) Section 2 of Presidential Decree No. 1931, series of 1984, entitled
31 
“Directing the Rationalization of Duty and Tax Exemption Privileges Granted
32 
to Government-Owned or -Controlled Corporations and All Other Units of
33 
Government”;
34 
(3) Section 1(c) and (d) of Executive Order No. 93, series of 1986,
35 
entitled "Withdrawing All Tax and Duty Incentives, Subject to Certain
36 
Exceptions, Expanding the Powers of the Fiscal Incentives Review Board and
37 
for Other Purposes”; and
38 
(4) Memorandum Order No. 23, series of 1986, entitled “Expanding the
39 
Membership of the Fiscal Incentives Review Board”.
40 
(D) The provisions of the following laws, that are inconsistent with the
41 
provisions on the Strategic Investment Priority Plan, are hereby repealed;
42 
(1) Article 7(1) of Chapter II; Article 26, Chapter I, Title I, Book I; and
43 
Chapter II, Title I, Book I of EO 226, series of 1987, as amended, entitled “the
44 
Omnibus Investments Code of 1987”; and
39


0
1 
(2) Sections 1(F), 2, and 3 of Executive Order No. 458, series of 1991
2 
entitled, “Devolving the Powers and Functions of the Board of Investments
3 
Over Investments Within the Autonomous Region in Muslim Mindanao to the
4 
Autonomous Regional Government and for Other Purposes”.
5 
(E) Sections 4, 5, 6, and 7 of RA 10708, entitled “An Act Enhancing
6 
Transparency in the Management and Accounting of Tax Incentives Administered by
7 
Investment Promotion Agencies.”
8 
All other laws, decrees, executive orders, rules and regulations, or parts
9 
thereof which are contrary to or inconsistent with this Act are hereby repealed
10 
accordingly.
11 
SEC. 10-B, Amendatory Clause. -  The following laws, decrees, executive
12 
orders, rules and regulations are hereby amended or modified accordingly:
13 
(A) To transfer to the Fiscal Incentives Review Board the power of the
14 
Investment Promotion Agency Board to review, approve, or disapprove fiscal
15 
incentives and to mandate the Investment Promotion Agency Board to recommend
16 
to the Fiscal Incentives Review Board after a thorough review of the application, the
17 
approval or disapproval of the same, the following provisions are hereby amended:
18 
(1) Section 7(a) and (c) of Republic Act No. 7903, entitled “An Act
19 
Creating a Special Economic Zone and Freeport in the City of Zamboanga
20 
City Special Economic Zone Authority, Appropriating Funds Therefor, and for
21 
Other Purposes”;
22 
(2) Sections 4(f), 8, and 13(c) of Republic Act No. 9728, entitled “An
23 
Act Converting the Bataan Economic Zone located in the Municipality of
24 
Mariveles, Province of Bataan, into the Freeport Area of Bataan, Creating for
25 
this Purpose the Authority of the Freeport Area of Bataan (AFAB),
26 
Appropriating Funds Therefor and for Other Purposes”, as amended by
27 
Republic Act No. 11453;
28 
(3) Sections 12(b), 13(b), 15, and 15-C of Republic Act No. 7227,
29 
entitled “An Act Accelerating the Conversion of Military Reservations into
30 
Other Productive Uses, Creating the Bases Conversion and Development
31 
Authority for the Purpose, Providing Funds Therefor and for Other Purposes",
32 
as amended by Republic Act No. 9400;
33 
(4) Sections 69(n) of Subchapter IV-B of RA 9593, entitled “An Act
34 
Declaring a National Policy for Tourism as an Engine of Investment,
35 
Employment, Growth and National Development and Strengthening the
36 
Department of Tourism and its Attached Agencies to Effectively Implement
37 
that Policy, and Appropriating Funds Therefor”, as amended by Republic Act
38 
No. 11262;
39 
(5) Section 12(a) & (b) of Republic Act No. 9490, entitled “An Act
40 
Establishing the Aurora Special Economic Zone in the Province of Aurora,
41 
Creating for the Purpose the Aurora Special Economic Zone Authority,
42 
Appropriating Funds Therefor and for Other Purposes”, as amended by
43 
Republic Act No. 10083, entitled “An Act Amending Republic Act No. 9490,
44 
Otherwise Known as the "Aurora Special Economic Zone Act of 2007”;
40


'3
1 
(6) Section 6(c) of Republic Act No. 7922, entitled “An Act Establishing
2 
a Special Economic Zone and Free Port in the Municipality of Santa Ana and
3 
the Neighboring Islands of Cagayan, Providing Funds Therefor, and for Other
4 
Purposes”;
5 
(7) Section 4(a) of Presidential Decree No. 538, entitled "Creating and
6 
Establishing the PHIVIDEC Industrial Authority and Making it a Subsidiary
7 
Agency of the Philippines Veterans Investment Development Corporation,
8 
Defining its Powers, Functions and Responsibilities, and for Other Purposes”;
9 
(8) Sections 13(a) and 15 of RA 7916, “An Act Providing for the Legal
10 
Framework and Mechanisms for the Creation, Operation, Administration and
11 
Coordination of Special Economic Zones in the Philippines, Creating for this
12 
Purpose, the Philippine Economic Zone Authority and for Other Purposes, as
13 
amended by RA 8748 entitled; and
14 
(B) The provisions of the following laws, including the tax incentives, that are
15 
inconsistent with this Act are hereby amended:
16 
(1) Section 24 of Republic Act No. 7916, entitled “An Act Providing for
17 
the Legal Framework and Mechanisms for the Creation, Operation,
18 
Administration, 
and Coordination of Special Economic Zones in the
19 
Philippines, Creating for the Purpose the Philippine Economic Zone Authority
20 
(PEZA), and for Other Purposes” as amended by Republic Act No. 8748”;
21 
(2) Sections 12(c), 15, 15-A, 15-B, 15-C of Republic Act No. 7227,
22 
entitled “An Act Accelerating the Conversion of Military Reservations into
23 
other Productive Uses, Creating the Bases Conversion and Development
24 
Authority for this Purpose, Providing Funds therefor and for other Purposes”
25 
as amended by Republic Act No. 9400, and further amended by Executive
26 
Order No. 619, series of 2007”;
27 
(3) Section 6 of Republic Act No. 9728, entitled "An Act Converting the
28 
Bataan Economic Zone Located in the Municipality of Mariveles, Province of
29 
Bataan, into the Freeport Area of Bataan (FAB), Creating for this Purpose the
30 
Authority of the Freeport Area of Bataan (AFAB), Appropriating Funds
31 
Therefor and for Other Purposes”;
32 
(4) Sections 86(b) of Republic Act No. 9593, entitled “An Act Declaring
33 
a National Policy for Tourism as an Engine erf Investment, Employment,
34 
Growth and National Development, and Strengthening the Department of
35 
Tourism and its Attached Agencies to Effectively and Efficiently Implement
36 
That Policy, and Appropriating Funds Therefor”;
37 
(5) Section 8 of Presidential Decree No. 538, entitled “Creating and
38 
Establishing the PHIVIDEC Industrial Authority and Making it a Subsidiary
39 
Agency of the Philippine Veterans Development Corporation, Defining its
40 
Powers, Functions and Responsibilities, and for Other Purposes” as amended
41 
by Presidential Decree No. 1491;
42 
(6) Section 1(1.1) of Executive Order No. 97-A, series of 1993, entitled
43 
“Further Clarifying the Tax and Duty-Free Privilege Within the Subic Special
44 
Economic and Free Port Zone”;
41


1 
(C) The provisions of the following laws that are inconsistent with the
2 
provisions on the Strategic Investment Priority Plan are hereby amended:
3 
(1) Section 13(j) of Republic Act No. 9728, entitled “An Act Converting
4 
the Bataan Economic Zone located in the Municipality of Mariveles, Province
5 
of Bataan, into the Freeport Area of Bataan, Creating for this Purpose the
6 
Authority of the Freeport Area of Bataan (AFAB), Appropriating Funds
7 
Therefor and for Other Purposes", as amended by Republic Act No. 11453;
8 
(2) Section 12(f) of Republic Act No. 9490, as amended, entitled “An
9 
Act Establishing the Aurora Special Economic Zone in the Province of Aurora,
10 
Creating for the Purpose the Aurora Special Economic Zone Authority,
11 
Appropriating Funds Therefor and for O ther Purposes”;
12 
(3) Section 6(f) of Republic Act No. 7922 entitled, “An Act Establishing
13 
a Special Economic Zone and Free Port in the Municipality of Santa Ana and
14 
the Neighboring Islands of Cagayan, Providing Funds Therefor, and for Other
15 
Purposes";
16 
(4) Section 21 of Republic Act No. 7916, as amended, entitled “An Act
17 
Providing for the Legal Framework and Mechanisms for the Creation,
18 
Operation, Administration and Coordination of Special Economic Zones in the
19 
Philippines, Creating for this Purpose, the Philippine Economic Zone Authority
20 
and for Other Purposes;
21 
(5) Article 32, Chapter III, Title I, Book I of EO 226, series of 1987, as
22 
amended, entitled “the Omnibus Investments Code of 1987”;
23 
(6) Section 5 of Executive Order No. 80, series of 1993 entitled,
24 
“Authorizing the Establishment of the Clark Development Corporation as the
25 
Implementing Arm of the Bases Conversion and Development Authority for
26 
the Clark Special Economic Zone, and Directing all Heads of Departments,
27 
Bureaus, Offices, Agencies and Instrumentalities of Government to Support
28 
the Program”
29 
(7) Sections 4(b), 13(b)(7) of Republic Act No. 7227 entitled, ““An Act
30 
Accelerating the Conversion of Military Reservations into Other Productive
31 
Uses, Creating the Bases Conversion and Development Authority for this
32 
Purpose, Providing Funds Therefor and for Other Purposes”;
33 
(8) Sections 85 and 88(c)(1) of Republic Act No. 9593, as amended by
34 
Republic Act No. 11262, entitled “An Act Declaring a National Policy for
35 
Tourism as an Engine of Investment, Employment, Growth and National
36 
Development, and Strengthening the Department of Tourism and its Attached
37 
Agencies to 
Effectively 
and 
Efficiently 
lmp)lement That 
Policy, 
and
38 
Appropriating Funds Therefor”; and
39 
All other laws, decrees, executive orders, rules and regulations, or parts
40 
thereof which are contrary to or inconsistent with this Code are hereby amended or
41 
modified accordingly.
42 
SEC. 11. Separability Clause. -  If any provision or part of this Act is declared
43 
invalid or unconstitutional, such declaration shall be confined in its operation to the
42


1 
clause, sentence, paragraph, or part thereof directly involved in the case, whereas
2 
the parts or provisions not affected thereby shall remain in full force and effect.
3 
SEC. 12. Appropriation. -  The National Tax Research Center, as the
4 
secretariat of the Fiscal Incentives Review Board, shall be provided with an initial
5 
appropriation of One Hundred Million Pesos (PHP 100,000,000.00) to be drawn from
6 
the available funds from the National Treasury not otherwise appropriated.
7 
Appropriations for the succeeding years shall be included in the annual General
8 
Appropriations Act.
9 
SEC. 13. Implementing Rules and Regulations. -  Within ninety (90) days from
10 
the effectivity of this Act, the Secretary of Finance upon the recommendation of the
11 
Commissioner of Internal Revenue, shall promulgate the necessary rules and
12 
regulations for its effective implementation; Provided, that for the provisions under
13 
Title XIII, the Secretary of Finance and the Secretary of Trade and Industry shall
14 
jointly promulgate the necessary rules and regulations thereof within the same
15 
period, after due consultations with the Commissioner of Internal Revenue, the
16 
Board of Investments, and other Investment Promotion Agencies, for its effective
17 
im plem entation.
18 
SEC. 14. Effectivity. -  This Act shall take effect fifteen (15) days after its
19 
complete publication in the Official Gazette or in a newspaper of general circulation;
20 
Provided, that the effectivity of the provisions under Sections 5, 6 and 7 shall
21 
retroact to January 1, 2020.
Approved,
43