NextGen Day

MANILA, Philippines — The Fiscal Incentives Review Board (FIRB) has authorized tax incentives for a proposed PHP1.5 billion Cebu City-based shipping vessel that specializes in RoRo passenger and freight operations.

The gift includes a four-year income tax vacation, five years of increased deductions, and eleven years of import tariff exemption.

The new shipping vessel travels between Cebu and Cagayan de Oro (CDO) in less time and at a comparable fee, distinguishing itself in the market as a handy, cost-effective, and competitive inter-island vessel in the Philippines.

The tax incentive clearance for the transportation player “aligns with the national government’s desire to modernize transportation and boost competition in the Philippine shipping business,” said Finance Secretary and FIRB Chairman Carlos Dominguez III.

Ramon Lopez, the Trade Secretary and co-chair of the FIRB, also supports the approval because the project “will continue to generate revenues for the government even after the incentive period has ended, which is a significant economic benefit that the FIRB considers in granting tax incentive applications.”

According to Lopez, the Cebu-CDO-Cebu route is served by a small number of shipping lines, thus “the arrival of a new competitor will help to strengthening the competitiveness of the region’s water transportation with an emphasis on passenger safety, welfare, and comfort.”

Ceferino Rodolfo, Trade Undersecretary and BOI Managing Director, stated that the project’s prospective advantages are expected to offset the costs of providing incentives, which are principally driven by increased revenues from the activity and significant local spending on direct materials.

The project is projected to boost the flow of products and services between Cebu and CDO by increasing access to marine transportation, according to Rodolfo.

The new shipping vessel aims to boost industry linkages and agricultural trade between Central Visayas and Northern Mindanao, in addition to increasing productivity and efficiency in the movement of products and services.

In 2021, the FIRB approved tax incentive proposals for five large-scale projects involving manufacturing and the development of mass housing units, totaling PHP119.5 billion in investment capital.

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