The Cabinet-level Fiscal Incentives Review Board (FIRB) has approved the grant of perks to three telecommunications tower companies for its nationwide rollout of fiber optic network for high speed broadband services.
The Department of Finance (DOF) said these three telcos—SkyTowers Infra Inc., Frontier Tower Associates Philippines Inc. and Transcend Towers Infrastructure Philippines Inc.—which have a combined total project cost of P78.2 billion will get the same incentives package given to Converge ICT Solutions Inc. but on the condition that all their towers will be built in areas that lack service.
The applications for incentives of these three tower companies were endorsed by the Board of Investments.
The tax incentives given to these telco companies include 4 years of income tax holiday (ITH), followed by 5 years of enhanced deductions, and 11 years of duty exemption on importations of capital equipment, raw materials, spare parts, or accessories from the date of registration, unless otherwise extended in the Strategic Investment Priority Plan (SIPP).
The SIPP will determine the priority industries, projects, and activities that can be granted fiscal incentives by the government under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
“The approval of these projects is urgent, given the current gap in the number of towers needed to service our population,” FIRB Secretariat head and Finance Assistant Secretary Juvy Danofrata said in a statement. “We are optimistic that these approved applications will pave the way for our country to finally have improved connectivity and more quality service.”
Danofrata told the BusinessMirror that the Converge project was the biggest in terms of investment value that was granted by tax incentives by the FIRB so far since the enactment of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) last year.
Through Converge’s P150.6-billion fiber broadband rollout project, it is expected to fulfill its performance commitments, such as providing better and cheaper internet access in the country’s unserved and underserved communities, and strengthening interconnectivity in these areas where the connection is normally slow and unsteady.
“We expect Converge to deliver on its performance commitment of faster and cheaper Internet access in remote localities as this will not only address our pain points with regard to connectivity but also provide more employment opportunities to our people in rural areas,” said Finance Secretary and FIRB Chairman Carlos Dominguez III.
To date, the FIRB has so far approved and granted incentives to 11-big ticket projects with a combined investment capital of P368 billion.
These projects involve cement manufacturing activities, construction of mass housing units, shipbuilding, rail operations of a subway, and communications infrastructures.
CREATE expanded the FIRB’s powers and functions to include approval of the grant of tax incentives to registered business enterprises. The FIRB is tasked to review and approve fiscal incentives for projects with a total investment capital of more than P1 billion. The granting of tax incentives to projects amounting to P1 billion and below is delegated to investment promotion agencies.