DAVAO CITY—The Fiscal Incentives Review Board (FIRB) has approved tax incentives to a Cebu City-based shipping company, specializing in roll-on roll-off (RoRo) passenger and cargo operations.
Finance Secretary and FIRB Chairman Carlos Dominguez III said the incentives include four years of income tax holiday, five years of enhanced deductions, and 11 years of duty exemption on importations.
The company is set to operate the Cebu City-Cagayan de Oro (CDO) City route with an investment of P1.5-billion. It would reduce travel time and still offers a comparable rate, “setting itself apart in the market as a convenient, cost-friendly, and competitive inter-island vessel in the country,” FIRB said in a news statement.
Dominguez said the tax incentive approval for the transportation player “aligns with the national government’s aim to modernize transportation and to increase competition in the shipping industry in the Philippines.”
Trade Secretary and FIRB co-chairman Ramon Lopez said the project would be generating revenues for the government “even after the incentive period which is a substantial economic benefit the FIRB considers in granting tax incentive applications”.
Lopez said there were limited shipping lines serving the Cebu-CDO-Cebu route, “thus, the entry of a new player would contribute to enhancing the competitiveness of the region’s water transport with focus on passenger safety, welfare, and comfort.”
Trade Undersecretary and Board of Investment Managing Head Ceferino Rodolfo said the potential benefits from the project “are estimated to outweigh the cost of granting incentives, which are primarily driven by additional revenues from the activity and substantial domestic spending on direct materials”.
With increased access to sea transportation, he said, the project was expected to stimulate a higher flow of goods and services between the cities of Cebu and Cagayan de Oro.
The company said that apart from an increase in productivity and efficiency of the transport of goods and services, it would also seek to stimulate industry linkages and agricultural trade between Central Visayas and Northern Mindanao.
In 2021, the FIRB approved tax incentives applications of five big-ticket projects, involving manufacturing activities and the construction of mass housing units, with a combined investment capital of P119.5 billion.