 |
|
III. MEASURES AND POLICY INSTRUMENTS USED FOR INTEGRATION
[ III | III-A
| III-B | III-C ]
B. Market-based instruments
[ B | B-1
| B-2 | B-3 | B-4
| B-5]
1. Financial incentives
Previously, section 56 of the Environmental
Code of the Philippines, PD 1152, encouraged industry to install anti-pollution
devices over a five-year period by offering tax incentives. Those incentives
included: (a) an exemption of up to 50 per cent of the tariff duties for
imports of pollution control devices; and (b) tax credits equivalent to
50 per cent of the value of the tax and tariff duties that would have been
paid, had the pollution control equipment been imported. The tax incentives,
however, expired in 1984 and were not renewed. The policy was considered
unsuccessful since most of the companies used the incentive system as a
means of securing tax exemptions and credits even on equipment that was
not used for pollution control. At present, the provision of tax incentives
is being reconsidered under a pending House
Bill, HB 5852. The bill proposes that manufacturers or owners of industrial
facilities/plants who install anti-pollution control devices and/or wastewater
treatment facilities will be entitled to a tax exemption for an amount
equivalent to 5 per cent of their total income in any particular year.
The proposed House Bill is currently facing opposition, as it is believed
that it will result in revenue losses on the part of the government without
reducing pollution. Those opposing the Bill still believed that firms may
buy and install pollution control devices or treatment facilities, but
not necessarily use them in their operation because of the high costs associated
with their operation.
At present, new and expanding companies that register with BOI can still
avail themselves of tax incentives. Under Executive
Order 226, BOI grants incentives to industries covered by the Investment
Priorities Plan, a list of which it determines annually. BOI grants exemptions
of up to 100 percent of the customs duties and national internal revenue
tax payable on imports of machinery and equipment and accompanying spare
parts, provided: (a) such items are not manufactured domestically; (b)
such items are not manufactured domestically in sufficient quantities or
are not of comparable quality and/or reasonably priced; or (c) there is
a reasonable need for such products. Pollution control equipment is considered
by BOI to fall within category (c).
|
|
|
