Philippines tightens tax incentives

"We should be stricter in approving projects," Domingo, who is also BOI chairman, said.

The trade chief said the incentives-giving agency will review the list of industries and projects that would be qualified for perks under the 2011 Investment Priorities Plan (IPP).

The annual IPP identifies business activities that qualify for tax incentives and other perks from the government.

Domingo said the BOI will also slap penalties on projects that are unable to comply with their pledges in a bid to raise the actual inflows of investments.

To ease the registration of new businesses, DTI and the Department of Interior and Local Government (DILG) have devised a streamlined Business Permits and Licensing System (BPLS).

In a briefing, DILG Secretary Jesse Robredo said the local government units (LGUs) that will implement the BPLS could get a slice of the proposed "performance challenge fund", which would be included in the department's 2011 budget.

Robredo said the BPLS is not mandatory, therefore, the national government should come up with a compliance mechanism-such as the proposed additional funding-to encourage LGUs to streamline their business registration procedures.

The application for a new business permit should take just five days to complete, while the renewal of a business permit should be done in 10 minutes. Domingo said the success of the program will be measured by the various global competitiveness rankings, in which the Philippines lags behind its Asian counterparts.

"We expect our rankings to improve," he said.

As part of their commitment to promote the implementation of the BPLS, the DILG and the DTI on Friday signed a memorandum of agreement on local investment reforms; a joint memorandum circular on BPLS standards; and a joint administrative order on the implementatio