(New requirement on top of existing laws) Firms enjoying tax perks to do CSR
Katrina Mennen A. Valdez
Manila Times
THE Board of Investments (BOI) will require investors applying for tax and other perks to engage in corporate social responsibility (CSR) activities corresponding to the income tax holiday given them.
Trade Undersecretary Elmer C. Hernandez, who is also BOI managing head, said in the agency approved the new policy last week.
“This is to ensure holistic development of the national economy by safeguarding the life of people and enhanc[ing] private-public partnership on poverty alleviation,” he said.
This new policy is based on Article 2, or the Declaration of Investment Policies of Executive Order 226, or the Investments Code of 1987, which calls for an accelerated sound development of the national economy through which the “state shall ensure holistic development by safeguarding the well-being of the social, cultural and ecological life of the people.”
This move will ensure that the benefits granted to these companies will trickle down to host communities, Hernandez said.
Under the new policy, projects approved on pioneer status or those firms granted six years of income tax holiday shall automatically enjoy four years of their perk. But failure to implement a CSR activity would mean forfeiture of the two remaining years of the tax holiday.
Nonpioneer status projects, or those with income tax holiday of four years, will only be “encouraged” to undertake CSR activities, Hernandez said.
“CSR activities must be aligned with those identified by the National Anti-Poverty Commission; the “Country Development” provision of R.A. 7942 otherwise known as the Mining Act, which requires that one percent of the mining and milling cost should be devoted to country development; and the Department of Energy regulation 1-94 on environmental protection,” he said.
Hernandez said the BOI policy may also require mining and energy projects to undertake additional CSR activities than what is required of them under existing laws.
Under the agency’s rules, the CSR activities must also be submitted anytime before the first application of the income tax holiday, and shall commence anytime during the four-year availment of the tax perk. Hernandez said the CSR activity is on a per project basis and not on a per company basis.
“We have visitorial powers [on their] CSR activities to [determine] whether it is implemented. Those found not complying with the requirement would lose their [income tax holiday] on the remaining two years of the six year availment period,” the BOI official said.
No Comments, Comment or Ping
Reply to “(New requirement on top of existing laws) Firms enjoying tax perks to do CSR”