Section 16Sec./Art. 16

A new Title XIII shall be introduced in the National Internal Revenue Code of 1997, as amended, and the existing Title XIII and XIV shall re-sectioned accordingly. The new title XIII shall read as follows:

"TITLE XIII

TAX INCENTIVES

"CHAPTER I

GENERAL PROVISIONS ON TAX INCENTIVES

"SEC. 291. Scope and Coverage. - This title shall cover all existing Investment Promotion Agencies as defined in this Code or related laws unless otherwise specifically exempted from the coverage of this Code.

"The Investment Promotion Agencies shall maintain their functions and powers as provided under the special laws governing them except to the extend modified by the provisions of this Code: Notwithstanding the provisions of this Section, the Department of Finance, the Bureau of Internal Revenue, and the Bureau of Customs shall retain their respective mandates, powers and functions as provided for under this Act and related laws.

"SEC. 292. Extent of Authority to Grant Tax Incentives. - The Fiscal Incentives Review Board, or the Investment Promotion Agencies, under a delegated authority from the Fiscal Incentives Review Board, shall grant the appropriate tax incentives provided in this title to be granted to registered business enterprises only to the extent of their approved registered project or activity under the Strategic Investment Priority Plan.

"SEC. 293. - Definitions. - When used in this title:

"(A) Capital equipment refers to machinery, equipment, major components thereof, tools, devices, applications or apparatus, which are directly or reasonably needed in the registered project or activity of the registered enterprise;

"(B) Direct local employment refers to the full and decent employment of Filipinos by registered business enterprise under a employer-employee relationship to perform functions that are directly related to the production of goods or performance of services under the registered project or activity;

"(C) Domestic input refers to purchases of locally manufactured goods or locally produced raw materials or domestically outsourced services known as services embedded in manufacturing that are used directly in the production of goods under the registered project or activity. In the case of locally manufactured goods, fifty percent (50%) of the value-added of the said good should likewise be locally produced or manufactured;

"(D) Domestic market enterprise refers to any enterprise registered with the Investment Promotion Agency other than export enterprise;

"(E) Export enterprise refers to any individual, partnership, corporation, Philippine branch of a foreign corporation, or other entity organized and existing under Philippine laws and registered with the Investment Promotion Agency to engage in manufacturing, assembling or processing activity, and services such as information technology (IT) activities and business process outsourcing (BPO), and resulting in the direct exportation, and/or sale of its manufactured, assembled or processed product or IT/BPO services to another registered export enterprise that will form part of the final export product or export service of the latter, of at least seventy percent (70%) of its total production or output;

"(F) Freeport zones refers to an isolated and policed area adjacent to a port of entry, which shall be operated and managed as a separate customs territory to ensure free flow or movement of goods, except those expressly prohibited by law, within, into, and exported out of the freeport zone where imported goods may be unloaded for immediate transshipment or stored, repacked, sorted, mixed, or otherwise manipulated without being subject to import duties. However, movement of these imported goods from the free-trade area to a non-free trade area in the country shall be subject to all applicable internal revenue taxes and duties: Provided, That for the freeport to shall have a permanent customs control or customs office at its perimeter;

"(G) Investment capital refers to the value of investment indicated in Philippine currency, excluding the value of land and working capital, that shall be used to carry out a registered project or activity, except that land shall be included as investment capital for registered real estate development. Investment capital may include the cost of land improvements, building, leasehold improvements, machinery and equipment, and other non-current tangible assets;

"(H) Investment Promotion Agencies refer to government entities created by law, executive order, decree or other issuance, in charge of promoting investments, granting and administering tax and non-tax incentives, and overseeing the operations of the different economic zones and freeports in accordance with their respective special laws. These include the Board of Investments (BOI), Regional Board of Investments-Autonomous Region in Muslim Mindanao (RBOI-ARMM), Philippine Economic Zone Authority (PEZA), Bases Conversion and Development Corporation (BCDA), Subic Bay Metropolitan Authority (SBMA), Clark Development Corporation (CDC), John Hay Management Corporation (JHMC), Poro Point Management Corporation (PPMC), Cagayan Economic Zone Authority (CEZA).

Zamboanga City Special Economic Zone Authority (ZCSEZA), PHIVIDEC Industrial Authority (PIA), Aurora Pacific Economic Zone and Freeport Authority (APECO), Authority of the Freeport Area of Bataan (AFAB), Tourism Infrastructure and Enterprise Zone Authority (TIEZA), and all other similar existing authorities or that may be created by law unless otherwise specifically exempted from the coverage of this Code;

"(I) Metropolitan areas refers to Metro Cebu and Metro Davao or those local government units which are later qualified or grouped as such by the National Economic Development Authority or through laws or executive issuances;

"(J) Other govenrment agencies administering tax incentives refer to government agencies other than Investment Promotion Agencies which register or administer tax incentives of any kind to any specific entities and/or class of persons pursuant to any law;

"(K) Other registered entities refer to any individual, partnership, organization, corporation, Philippine branch of a foreign corporation, or other entity incorporated and/or organized and existing under Philippine laws, and registered with other government agencies administering tax incentives;

"(L) Qualified capital expenditure refers to purchases of capital goods with a useful life of more than one (1) year acquired for the entity's production of goods and services to be directly used in the project or activity of the registered business enterprise;

"(M) Registered business enterprise refers to any individual, partnership, corporation, Philippine branch of a foreign corporation, or other entity organized and existing under Philippine laws and registered with an Investment Promotion Agency excluding service enterprises such as those engaged in customs brokerage, trucking or forwarding services, janitorial services, security services, insurance, banking, and other financial services, consumers' cooperatives, credit unions, consultancy services, retail enterprises, restaurants, or such other similar services, as may be determined by the Fiscal Incentives Review Board, irrespective of location, whether inside or outside the zones, duly accredited or licensed by any of the Investment Promotion Agencies and whose income delivered within the economic zones shall be subject to taxes under the National Internal Revenue Code of 1997, as amended;

"(N) Research and development refers to experimental or other related projects or activities:

"(1) Whose outcome cannot be known or determined in advance on the basis of current knowledge, information or experience, but can only be determined by applying a systematic progression of work;

"(i) Based on principles of established science; and

"(ii) Proceeds from hypothesis to experiment, observation and evaluation, and leads to logical conclusions.

"(2) That are conducted for the purpose of generating new knowledge, including new knowledge in the form of new or improved materials, products, devices, processes or services;

"(O) Sophisticated refers to the state when a product or service requires a high level of technology, human capital, competencies or know-how, and infrastructure to be produced or offered;

"(P) Sophistication refers to the level of technology, human capital, competencies or know-how, and infrastructure required for a product or service to be offered by an economy like that of the Philippines;

"(Q) Source document refers to input materials and documents reasonable needed by information technology (IT) and IT-enabled industries such as books, directories, magazines, newspapers, brochures, pamphlets, medical records or files, legal records or files, instruction materials, and drawings, blueprints, or outlines;

"(R) Special economic zone or ecozone refers to a selected area, which shall be operated and managed as a separate customs territory that is highly developed or has the potential to be developed into an agro-industrial, industrial, information technology, or tourist/recreational area, whose metes and bounds are fixed or delimited by presidential proclamations and within a specific geographical area which includes industrial estates (IEs), export processing zone (EPZs), ICT parks and centers, and free trade zones: Provided, That for the ecozone to qualify as a separate customs territory, an ecozone shall have a permanent customs control or customs office at its perimeter: Provided, however, That areas where mining extraction is undertaken shall not be declared as an ecozone: Provided, further, That vertical ecozones, such as, but not limited to, buildings, selected floors within buildings, and selected areas on a floor, need to comply with the minimum contiguous land area as determined by the Fiscal Incentives Review Board; and

"(S) Training refers to courses, curricula, certifications or modules provided to Filipino employees that are directly related to the production of goods and performance of service under the registered project or activity and that are of a technical nature, which shall develop or improve the specific skills or practical knowledge of the employee especially in the mechanical, industrial art, scientific field or practical science of a particular position or job function in the registered project or activity, or in preparation for enhancing the value chain."

"CHAPTER II

TAX AND DUTY INCENTIVES

"SEC. 294. Incentives. - Subject to the condition and period of availment in Sections 295 and 296, respectively, the following types of tax incentives may be granted to registered projects or activities:

"(A) Income Tax Holiday (ITH);

"(B) Special Corporate Income Tax (SCIT) Rate - For export enterprise, domestic market enterprise with a minimum investment capital of Five hundred million pesos (P500,000,000.00), and domestic market enterprise under the Strategic Investment Priority Plan engaged in activities that are classified as 'critical', a tax rate equivalent to five percent (5%) effective July 1, 2020, based on the gross income earned, in lieu of all national and local taxes.

"The domestic market enterprise under the Strategic Investment Priority Plan engaged in activities that are classified as 'critical' shall refer to those enterprises belonging to industries identified by the National Economic and Development Authority to be crucial to national development.

"The period of availment of the Special Corporate Income Tax shall be subject to the conditions set under paragraphs (A) and (B) of Section 296 of this Act:

"Provided, That the national government share shall be three percent (3%) of the gross income earned effective July 1, 2020: Provided, further, That, if applicable, the shares of the local government units and the Investment Promotion Agencies under the special laws governing the latter shall be observed and shall not result in the diminution of their respective shares: Provided, finally, That the share of the local government unit which has jurisdiction over the place of the registered activity of registered business enterprise outside ecozones and freeports shall be two percent (2%) and shall be directly remitted by the registered business enterprise to such local govenrment units.

"(C) Enhanced Deductions (ED) - For export enterprise, domestic market enterprise, and critical domestic market enterprise, the following may be allowed as deductions:

"(1) Depreciation allowance of the assets acquired for the entity's production of goods and services (qualified capital expenditure) - additional ten percent (10%) for buildings; and additional twenty percent (20%) for machineries and equipment;

"(2) Fifty percent (50%) additional deduction on the labor expense incurred in the taxable year;

"(3) One hundred percent (100%) additional deduction on research and development expense incurred in the taxable year;

"(4) One hundred percent (100%) additional deduction on training expense incurred in the taxable year;

"(5) Fifty percent (50%) additional deduction on domestic input expense incurred in taxable year;

"(6) Fifty percent (50%) additional deduction on power expense incurred in the taxable year;

"(7) Deduction for reinvestment allowance to manufacturing industry - When a manufacturing registered business enterprise reinvests its undistributed profit or surplus in any of the projects or activities listed in the Strategic Investment Priority Plan, the amount reinvested to a maximum of fifty percent (50%) shall be allowed as a deduction from its taxable income within a period of five (5) years from the time of such reinvestment; and

"(8) Enhanced Net Operating Loss Carry-Over (NOLCO). - The net operating loss of the registered project or activity during the first three (3) years from the start of commercial operation, which had not been previously offset as deduction from gross income, may be carried over as deduction from gross income within the next five (5) consecutive taxable years immediately following the year of such loss.

"(D) Duty exemption on importation of capital equipment, raw materials, spare parts, or accessories; and

"(E) Value-Added Tax (VAT) exemption on importation and VAT zero-rating on local purchases.

"SEC. 295. Conditions of Availment. - The tax incentives in the preceding Section shall be governed by the following rules:

"(A) The income tax holiday shall be followed by the Special Corporate Income Tax rate or Enhanced Deductions.

"(B) At the option of the export enterprise, the domestic market enterprise with a minimum investment capital of Five hundred million pesos (P500,000,000.00), and the domestic market enterprise engaged in activities that are classified as 'critical,' the Special Corporate Income Tax rate or enhanced deductions shall be granted: Provided, That in no case shall the enhanced deductions be granted simultaneously with the Special Corporate Income Tax.

"The following conditions for the availment of each enhanced deductions shall complied with:

"(1) The depreciation allowance of the assets acquired for the entity's production of goods and services (qualified capital expenditure) shall be allowed for assets that are directly related to the registered enterprise's production of goods and services other than administrative and other support services.

"(2) The additional deduction on the labor expense shall not include salaries, wages, benefits, and other personnel costs incurred for managerial, administrative, indirect, labor,, and support services.

"(3) The additional deduction on research and development expense shall only apply to research and development directly related to the registered project or activity of the entity and shall be limited to local expenditure incurred for salaries of Filipino employees and consumables and payments of local research and development organizations.

"(4) The additional deduction on the labor expense shall not include salaries, wages, benefits, and other personnel costs incurred for managerial, administrative, indirect labor, and support services.

"(5) The additional deduction on domestic input expense shall only apply to domestic input that are directly related to and actually used in the registered export project or activity of the registered business enterprise.

"(6) The additional deduction on power expense shall only apply to power utilized for the registered project or activity.

"(7) The deduction for reinvestment allowance to manufacturing industry shall be determined in the Strategic Investment Priority Plan.

"(C) The duty exemption shall only apply to the importation of capital equipment, raw materials, spare parts, or accessories directly and exclusively used in the registered project or activity by registered business enterprises: Provided, That the following conditions are complied with:

"(1) The capital equipment, raw materials, spare parts, or accessories are directly and reasonably needed and will be used exclusively in and as part of the direct cost of the registered project or activity of the registered business enterprise, and are not produced or manufactured domestically in sufficient quantity or of comparable quality and at reasonable prices. Prior approval of the Investment Promotion Agency may be secured for the part-time utilization of said capital equipment, raw materials, spare parts, or accessories in a non-registered project or activity to maximize usage thereof: Provided, That the proportionate taxes and duties are paid on a specific capital equipment, raw materials, spare parts, or accessories in proportion to the utilization for non-registered projects or activities.

In the event that the capital equipment, raw materials, spare parts, or accessories shall be used for a non-registered project or activity of the registered business enterprise at any time within the first five (5) years from the date of importation, the registered business enterprise shall first seek prior approval of the concerned Investment Promotion Agency and pay the taxes and customs duties that were not paid upon the importation; and

"(2) The approval of the Investment Promotion Agency was obtained by the registered business enterprise prior to the importation of such capital equipment, raw materials, spare parts, or accessories.

"Within the first five (5) years from the date of importation, approval of the Investment Promotion Agency must be secured before the sale, transfer, or disposition of the capital equipment, raw materials, spare parts, or accessories, which were granted tax and customs duty exemption hereunder, and shall be allowed only under the following circumstances:

"(a) If made to another enterprise availing customs duty exemption on imported capital equipment, raw materials, spare parts, or accessories;

"(b) If made to another enterprise not availing of duty exemption on imported capital equipment, raw materials, spare parts, or accessories, upon payment of any taxes and duties due on t he net book value of the capital equipment, raw materials, spare parts, accessories to be sold;

"(c) Exportation of capital equipment, raw materials, spare parts, accessories, source documents, or those required for pollution abatement and control;

"(d) Proven technical obsolescence of the capital equipment, raw materials, spare parts, accessories; or

"(e) If donated to the TESDA, state universities and colleges (SUCs), or DepEd and CHED-accredited schools: Provided, That the donation shall be exempt from import duties and taxes, including donor's tax.

"Provided, That if the registered business enterprise sells, transfers, or dispose the aforementioned imported items without prior approval, the registered business enterprise and the vendee, transferee, or assignee shall be solidarily liable to pay twice the amount of the duty exemption that should have been paid during its importation: Provided, further, That the sale, transfer, or disposition of the capital equipment, raw materials, spare parts, or accessories made after five (5) years from date of importation shall require that prior notice to be given by the registered business enterprise to the Investment Promotion Agency: Provided, finally, That even if the sale, transfer, or disposition of the capital equipment, raw materials, spare parts or accessories was made after five (5) years from date of importation with notice to the Investment Promotion Agency, the registered business enterprise is still liable to pay the duties based on the net book value of the capital equipment, raw materials, spare parts, or accessories if it has violated any of its registration terms and conditions.

"(D) The VAT exemption on importation and VAT zero-rating on local purchases shall only apply to goods and services directly and exclusively used in the registered projects or activity by a registered business enterprise.

"Notwithstanding the provisions in the preceding paragraphs, sales receipts and other income derived from non-registered project or activity shall be subject to appropriate taxes imposed under this Code.

"(E) Notwithstanding any law to the contrary, the importation of COVID-19 vaccine shall be exempt from import duties, taxes and other fees, subject to the approval or licenses issued by the Department of Health or the Food and Drug Administration.

"(F) Persons who directly import petroleum products defined under Republic Act No. 8479, otherwise known as the 'Downstream Oil Industry Deregulation Act of 1998', for resale in the Philippine customs territory and/or in free zones as defined under Republic Act No. 10863, otherwise known as the Customs Modernization and Tariff Act, shall not be entitled to the foregoing tax and duty incentives, and shall be subject to appropriate taxes imposed under this Code.

"Any law to the contrary notwithstanding, the importation of petroleum products by any person, including registered business enterprises shall be subject to the payment of applicable duties and taxes as provided under Republic Act No. 10863, otherwise known as the Customs Modernization and Tariff Act, and this Code, respectively, upon importation into the Philippine customs territory and/or into free zones as defined under Republic Act No. 10863, otherwise known as the Customs Modernization and tariff Act:

"Provided, That the importer can file for claims for the refund of duties and taxes applicable under Republic Act No. 10863, otherwise known as the Customs Modernization and Tariff Act, and this Code, respectively, for direct or indirect export of petroleum products, and/or tax-exempt sales under the Customs Modernization and Tariff Act and other special laws within the period provided therein:

"Provided, further, That the importers who subsequently export fuel, subject to the appropriate rules of the fuel marking program, may apply for a refund of duties and taxes, as applicable under Republic Act No. 10863, otherwise known as the Customs Modernization and Tariff Act, and this Code.

"(G) Crude oil that is intended to be refined at a local refinery, including the volumes that are lost and not converted to petroleum products when the crude oil actually undergoes the refining process, shall be exempt from payment of applicable duties and taxes upon importation:

"Provided, That applicable duties and taxes on petroleum products shall be payable only upon lifting of the petroleum products produced from the imported crude oil, subject to rules and regulations that may be prescribed by the Bureau of Customs and the Bureau of Internal Revenue, to ensure that crude oil shall not be lifted from the refinery without payment of appropriate duties and taxes.

"Registered business enterprises, whose performance commitments include job generation, shall maintain their employment levels to the extent practicable, and in the case of reduced employment or when the performance commitment for job generation is not met, the registered business enterprises must submit to their respective Investment Promotion Agencies and the Fiscal Incentives Review Board their justification for the same.

"SEC. 296. Period of Availment. - The period of availment of incentives by the registered business enterprise shall be as follows:

"(A) For export enterprise and for domestic market enterprise under the Strategic Investment Priority Plan engaged in activities that are classified as 'critical': income tax holiday of four (4) to seven (7) years, depending on location and industry policies as specified in this Section, and followed by special corporate income tax rate or enhanced deductions for ten (10) years.

"A qualified expansion or entirely new project or activity registered under this Act may qualify to avail of a new set of incentives and its period of availment, granted under Sections 294 and 296 of this Act, respectively, subject to the qualifications set forth in the Strategic Investment Priority Plan and performance review of the Fiscal Incentives Review Board: Provided, That existing registered projects or activities prior ti the effectivity of this Act may qualify to register and avail of the incentives granted under this Act for the prescribed period, subject to the criteria and conditions set forth in Strategic Investment Priority Plan;

"(B) For domestic market enterprise under the Strategic Investment Priority Plan not classified as critical, income tax holiday for four (4) to seven (7) years followed by special corporate income tax or enhanced deductions for five (5) years:

"Provided, That only domestic market enterprise, which has an investment capital of not less than Five hundred million pesos (P500,000,000.00), shall be eligible for the special corporate income tax rate.

"A qualified expansion or entirely new project or activity registered under this Act may qualify to avail of a new set of incentives and its period of availment granted under Section 294 and 296 of this Act, respectively, subject to the qualifications set forth in the Strategic Investment Priority Plan and performance review by the Fiscal Incentives Review Board: Provided, That existing registered projects or activities prior to the effectivity of this Act may qualify to register and avail of the incentives granted under this Act for the prescribed period, subject to the criteria and conditions set forth in the Strategic Investment Priority Plan.

"The period of availment of the foregoing incentives shall commence from the actual start of commercial operations with the registered business enterprise availing of the tax incentives within three (3) years from the date of registration, unless otherwise provided in the Strategic Investment Priority Plan and its corresponding guidelines: Provided, That after the expiration of the transitory period under Section 311(C), export enterprises registered prior to the effectivity of this Act shall have the option to reapply and avail of the incentives granted under Section 249(B) for the same period provided under this Section, and may still be extended for a certain period not exceeding ten (10) years at any one time, subject to the conditions and qualifications set forth in the Strategic Investment Priority Plan and performance review by the Fiscal Incentives Review Board.

"For the purpose of this Section, the determination of the category shall be based on both location and industry of the registered project or activity, and other relevant factors as may be defined in the Strategic Investment Priority Plan.

"The location of the registered project or activity shall be prioritized according to the level of development as follows: (1) National Capital Region; (2) metropolitan areas or areas contiguous and adjacent to the National Capital Region; and (3) all other areas. The metropolitan areas shall be determined by the National Economic and Development Authority.

"The industry of the registered project or activity shall be prioritized according to national industrial strategy specified in the Strategic Investment Priority Plan. The Strategic Investment Priority Plan shall define the coverage of the tiers and provide the conditions for qualifying the activities:

"(1) Tier I shall include activities that (i) have high potential for job creation; (ii) take place in sectors with market failures resulting in under provision of basic goods and services; (iii) generate value creation through innovation, upgrading or moving up the value chain; (iv) provide essential support for sectors that are critical to industrial development; or (v) are emerging owing to potential comparative advantage.

"These activities shall include agriculture, fishing, forestry, and agribusiness activities, including handicrafts intended for export, and energy; ecozone and freeport zone development; manufacturing of medical supplies, devices and equipment, and construction of healthcare facilities; facilities for environmentally-sustainable disposal of waste; infrastructure; manufacturing and service industries that are emerging resulting from innovation, upgrading or addressing gaps in the supply and value chain; mass housing, as well as infrastructure, transportation, utilities, logistics and support services; the provision of cyber security services; and planned developments that use technologies and digital solutions that are crucial to the country's development.

"(2) Tier II shall include activities that produce supplies, parts and components, and intermediate services that are not locally produced but are critical to industrial development and import-substituting activities, including crude oil refining.

"(3) Tier III activities shall include (i) research and development resulting in demonstrably significant value-added, higher productivity, improved efficiency, breakthroughs in science and health, and high-paying jobs; (ii) generation of new knowledge and intellectual property registered and/or licensed in the Philippines; (iii) commercialization of patents, industrial designs, copyrights and utlity models owned or co-owned by a registered business enterprise; (iv) highly yechnical manufacturing; or (v) are critical to the structural transformation of the economy and require substantial catch-up efforts.

"These activities shall include agriculture, fishing, forestry agribusiness, and other activities and services that indispensably require the employment of knowledge processing, modern science; data analytics; creative content; engineering; state of the art technologies; technologies that are available in other countries but are not yet available or widely used in the Philippines; and research and development in the process of production of goods and services, resulting in demonstrably significant value-added, productivity, efficiency, breakthroughs in science and health, and high-paying jobs; and manufacturing of FDA-approved investigational drugs, medicines and medical devices.

"The period of availment of incentives based on the combination of both location and industry priorities, as determined in the Strategic Investment Priority Plan, shall be as follows:

Location/Industry Tiers

Tier I

Tier II

Tier III

National Capital Region

4 ITH + 10 ED/SCIT

5 ITH + 10 ED/SCIT

6 ITH + 10 ED/SCIT

Metropolitan areas or areas contiguous and adjacent to the National Capital Region

5 ITH + 10 ED/SCIT

6 ITH + 10 ED/SCIT

7 ITH + 10 ED/SCIT

All other areas

6 ITH + 10 ED/SCIT

7 ITH + 10 ED/SCIT

7 ITH + 10 ED/SCIT

"For domestic market activities:

Location/Industry Tiers

Tier I

Tier II

Tier III

National Capital Region

4 ITH + 5 ED/SCIT

5 ITH + 5 ED/SCIT

6 ITH + 5 ED/SCIT

Metropolitan areas or areas contiguous and adjacent to the National Capital Region

5 ITH + 5 ED/SCIT

6 ITH + 5 ED/SCIT

7 ITH + 5 ED/SCIT

All other areas

6 ITH + 5 ED/SCIT

7 ITH + 5 ED/SCIT

7 ITH + 5 ED/SCIT

"In addition to the incentives provided in tiers above, projects or activities of registered enterprises located in areas recovering from armed conflict or a major disaster, as determined by the Office of the President, shall be entitled to two (2) additional years of income tax holiday.

"Projects or activities registered prior to the effectivity of this Act, or under the incentive system provided herein that shall, in the duration of their incentives, completely relocate from the National Capital Region,, shall be entitled to three (3) additional years of income tax holiday: Provided, That the additional incentive shall commence at the completion of the relocation of operations.

"The industry and locational prioritization specified herein shall be subject to review and revision every three (3) years in accordance with the Strategic Investment Priority Plan, subject to the standards in Section 300 hereof, or in exceptional circumstances, to attract substantial investment to respond to a situation or crisis or to target specific industries.

"CHAPTER III

THE FISCAL INCENTIVES REVIEW BOARD

"SEC. 297. Expanded Functions of the Fiscal Incentives Review Board. - The functions and powers of the Fiscal Incentives Review Board created under Presidential Decree No. 776, as amended, shall be expanded as follows:

"(A) To exercise policy making and oversight functions on the administration and grant of tax incentives by the Investment Promotion Agencies and other govenrment agencies administering tax incentives. In particular, the Fiscal Incentives Review Board shall:

"(1) Determine the target performance metrics as conditions to avail of tax incentives;

"(2) Review and audit the compliance of other government agencies administering tax incentives, with respect to the administration and grant of tax incentives and impose sanctions such as, but not limited to, withdrawal, suspension, or cancellation of their power to grant tax incentives;

"(3) Determine the minimum contiguous land area that vertical economic zones should comply with;

"(4) Conduct regular monitoring and evaluation of investment and non-investment tax incentives, such as using cost-benefit analysis (CBA) to determine their impact on the economy and whether agreed performance targets are met; and

"(5) Check and verify, as necessary, the compliance of registered business enterprises with the terms and conditions of their availment, in particular the agreed target performance metrics, rules and regulations of this Act, and other relevant laws or issuances;

"(B) To approved or disapprove, the grant of tax incentives to the extent of the registered project or activity upon the recommendation of the Investment Promotion Agency: Provided, That the application for tax incentives shall be duly accompanied by a cost-benefit analysis: Provided, further, That the Fiscal Incentives Review Board shall prescribe the data requirements for the application of incentives to allow for the calculation of costs and benefits upon application: Provided, further, That the grant of tax incentives with investment capital of One billion pesos (P1,000,000,000.00) and below shall be delegated by the Fiscal Incentives Review Board to the concerned Investment Promotion Agency to the extent of the registered project or activity: Provided, furthermore, That the Fiscal Incentives Review Board may increase the threshold amount of One billion pesos (P1,000,000,000.00): Provided, finally, That the application for tax incentives shall be deemed approved if not acted upon within twenty (20) days from the date of submission of the application and complete relevant supporting documents to the Fiscal Incentives Review Board or the Investment Promotion Agency, as the case may be;

"(C) To approve applications for tax subsidies to government-owned or controlled- corporations, government instrumentalities, government commissaries, and state universities and colleges.

"For this purpose, the other government agencies shall ensure complete submission of applications, documents, records, books, or other relevant data or material;

"(D) To formulate place-specific strategic investment plans during periods of recovery from calamities and post-conflict situations and where the Fiscal Incentives Review Board determines that there is a need to attract many classes, firms, that would accelerate the growth of a region's flagship industries, in accordance with the Medium-Term Development Plan. The Fiscal Incentives Review Board may formulate and approve place-specific strategic investment plans and recommend incentives to the President, following the same procedure in Section 297;

"(E) To cancel, suspend, or withdraw the enjoyment of fiscal incentives of concerned registered business enterprises on its own initiative or upon the recommendation of the Investment Promotion Agency for material violations of any of the conditions imposed in the grant of fiscal incentives, including, but not limited to, the non-compliance of the agreed performance commitments and endorse registered business enterprises whose incentives are cancelled, suspended, or withdrawn to the concerned revenue agencies for the assessment and collection of taxes and duties due commencing from the first year of availment;

"(F) To cancel, suspend, or withdraw the enjoyment of tax subsidy of concerned government-owned or controlled corporations, government commissaries, and state universities and colleges, and when necessary, endorse the same to the concerned revenue agencies for assessment and collection of taxes and duties due, including fines or penalties, if warranted, for violations of any of the conditions imposed in the grant of tax subsidy, or provisions of this Act, or applicable rules;

"(G) To require Investment Promotion Agencies and other government agencies administering tax incentives to submit, regularly or when requested, summaries of approved investment and incentives granted, and firm-or entity-level tax incentives and benefits data as input to the Fiscal Incentives Review Board's review and audit function, and evaluation of performance of recipients of tax incentives.

For this purpose, the Fiscal Incentives Review Board shall maintain a masterlist of registered products and services for export or domestic consumption that are entitled to incentives: Provided, That, to facilitate compliance with the foregoing, the Department of Trade and Industry, in coordination with relevant regulatory bodies, shall cause the registration and reporting by registered business enterprises of the types of services rendered whether domestically or to foreign clients; types of products manufactured domestically, products imported and sold locally, and products exported;

"(H) To publish regularly, per firm, the data pertaining to the amount of tax incentives, tax payments, and other related information, including benefits data;

"(I) To obtain information, summon, examine, inquire and receive from other government agencies administering tax incentives, government-owned or controlled corporations, government instrumentalities, government commissaries, state universities and colleges, and local government units, documents, records, books, or other data relevant or material to the resolution of issues arising from the approval, disapproval, cancellation, suspension, withdrawal or forfeiture of tax subsidy, or in imposing penalties for violations of the terms and conditions on the availment of tax subsidy, or any of the provisions of this Act;

"(J) To submit annual reports to the Office of the President, as part of the budget process, covering its policy and activities in the administration of this Act, including recommendations on tax incentives policies and approval of tax incentives;

"(K) To decide on issues, on its own initiative or upon the recommendation of the Investment Promotion Agency, after due hearing, concerning the approval, disapproval, cancellation, suspension, withdrawal, or forfeiture of tax incentives or tax subsidy in accordance with this Act. The Fiscal Incentives Review Board shall decide on the matter within ninety (90) days from the date when the Fiscal Incentives Review Board declares the issues submitted for resolution. A business enterprise adversely affected by the decision of the Fiscal Incentives Review Board may, within thirty (30) days from receipt of the adverse decision, appeal the same to the Court of Tax Appeals;

"(L) To promulgate such rules and regulations as may be necessary to implement the intent and provisions of this Section;

"(M) To recommend to the President the grant of appropriate non-fiscal incentives in accordance with the Strategic Investment Priority Plan for highly desirable projects or very specific industrial activities and based on: (a) benefit-cost analysis approved by the Fiscal Incentives Review Board; and (b) containing a schedule of budgets of expenditures and sources of financing with magnitudes provisionally approved via resolution for inclusion in the upcoming National Expenditure Plans for the Development Budget Coordination Committees;

"(N) To adopt policies for the development and expansion of the domestic supply chain in order to reduce dependence on imports; promote diversification and sophistication of products produced and services offered, whether exported or consumed locally; and cater to local market demand; and

"(O) To exercise all other powers necessary or incidental to attain the purpose of this Act and other laws vesting additional functions on the Fiscal Incentives Review Board.

"The functions of the Fiscal Incentives Review Board under Sections 297(A)(1) and (5), (E), (G), (H), (J), and (K) shall be exercised in relation to the grant of tax incentives to registered projects or activities with the total investment capital of more than One billion pesos (P1,000,000,000.00), as provided herein.

"Notwithstanding the provisions in the preceding paragraphs, tax and duty incentives granted through legislative franchises shall be excepted from the foregoing expanded powers of the Fiscal Incentives Review Board to review, withdraw, suspend, or cancel tax incentives and subsidies."

"SEC. 298. Composition of the Fiscal Incentives Review Board. - The Fiscal Incentives Review Board shall be reconstituted as follows:

"Chairperson

-

Secretary of Finance

"Co-Chairperson

-

Secretary of Trade and Industry

"Members

-

Executive Secretary of the Office of the President

-

Secretary of Budget and Management

-

Director General of the National Economic and Development Authority

"The Board shall have a technical committee, which shall serve as its main support unit and perform functions as may be assigned, and shall be composed of the following:

"Chairperson

-

Undersecretary of Finance

"Members

-

Undersecretary or Assistant Secretary of the Office of the Executive Secretary

-

Undersecretary of Trade and Industry and Board of Investments Managing Head or Assistance Secretary of Trade and Industry

-

Undersecretary or Assistant Secretary of Budget and Management

-

Deputy or Assistant Director General of the National Economic Development Authority

-

Commissioner or Deputy Commissioner of Internal Revenue

-

Commissioner of the Philippine Competition Commission

-

Director General or Chairperson or Administrator of the Investment Promotion Agencies:Provided,That the participation of the Investment Promotion Agency representative in deliberations and decision-making processes of the technical committee shall be limited to the matters concerning their Investment Promotion Agency

"Secretariat

-

The secretariat shall be headed by an Assistant Secretary of Finance and shall be staffed by the National Tax Research Center."

"SEC. 299. Structure and Staffing Pattern. - To support the expanded functions of the Fiscal Incentives Review Board, the National Tax research Center, as secretariat thereof, shall create three (3) additional groups, namely, Fiscal Incentives Management Group, Monitoring and Evaluation Group, and Legal Group. Each group shall be composed of at least two (2) divisions, which will be headed by a deputy executive director. The existing administrative and financial branch of the National Tax Research Center shall be converted into a group to be headed by a deputy executive director and will be composed of four (4) divisions, namely, finance, human resource management and development, general services, and management and information systems.

"Provided, That the Fiscal Incentives Review Board secretariat is authorized to determine its organizational structure and staffing pattern, and create such services, divisions, and units, as it may be require or deem necessary in the future, subject to the approval by the Department of Budget and Management: Provided, finally, That nothing herein modifies the existing organizational structure and staffing pattern of the Investment Promotion Agencies or affects their power to maintain or determine their respective organizational structure and staffing pattern."

"CHAPTER IV

QUALIFIED PROJECTS OR ACTIVITIES FOR TAX INCENTIVES

"SEC. 300. Strategic Investment Priority Plan. - The Board of Investments, in coordination with the Fiscal Incentives Board, Investment Promotion Agencies, other government agencies administering tax incentives, and the private sector, shall formulate the Strategic Investment Priority Plan to be submitted to the President for approval, which may contain recommendations for types of non-fiscal support to create high-skilled jobs to grow a local pool of enterprises (MSMEs), that can supply to domestic and global value chains, to increase the sophistication of products and services that are produced and/or sourced domestically, to expand domestic supply and reduce dependence on imports, and to attract significant foreign capital or investment.

The Strategic Investment Priority Plan shall be valid for a period of three (3) years, subject to review and amendment every three (3) years thereafter unless there would be a supervening event that would necessitate its review.

"The Strategic Investment Priority Plan shall contain the following:

"(A) Priority projects or activities that are included in the Philippine Development Plan or its equivalent, or other government programs, taking into account any of the following:

"(1) Substantial amount of investments;

"(2) Considerable generation of employment, especially towards less developed areas;

"(3) Considerable amount of net exports;

"(4) use of modern, advance, or new technology;

"(5) Processes and innovations that will lead towards the attainment of the sustainable development goals, shall include, but not limited to, adoption of adequate environmental protection systems and sustainability strategies;

"(6) Addressing missing links and other gaps in the supply or value chain or otherwise moving up the value chain or product ladder;

"(7) Promotion of market competitiveness;

"(8) Enhancement of the capabilities of Filipino enterprises and professionals to produce and offer increasingly sophisticated products and services;

"(9) Contribution to Philippine food security and increase incomes in the agriculture and fisheries sector; or

"(10) Services and activities that can promote regional and global operations in the country.

"(B) Scope and coverage of location and industry tiers in Section 296; and

"(C) Terms and conditions on the grant of enhanced deductions under Section 294(C).

"All sectors or industries that may be included in the Strategic Investment Priority Plan shall undergo an evaluation process to determine the suitability and potential of the industry or the sector in promoting long-term growth and sustainable development, and the national interest. In no case shall a sector or industry be included in the Strategic Investment Priority Plan unless it is supported by a formal evaluation process or report.

"The projects or activities must comply with the specific qualification requirements or conditions for a particular sector or industry and other limitations as set and determined by the Board of Investments, and in coordination with the Fiscal Incentives Review Board.

"In no case shall the Investment Promotion Agencies accept applications unless the project or activity is listed in the Strategic Investment Priority Plan. Projects or activities not listed in the Strategic Investment Priority Plan shall be automatically disapproved.

"SEC. 301.

Power of the President to Grant Incentives. - Notwithstanding the provisions of Section 295 and 296, the President may, in the interest of national economic development and upon the recommendation of the Fiscal Incentives Review Board, modify the mix, period or manner of availment of incentives provided under this Code or craft the appropriate financial support package for a highly desirable project or a specific industrial activity based on defined development strategies for creating high-value jobs, building new industries to diversify economic activities, and attracting significant foreign and domestic capital or investment, and the fiscal requirements of the activity or projects, subject to maximum incentive levels recommended by the Fiscal Incentives Review Board: Provided, That the grant of income tax holiday shall not exceed eight (8) years and thereafter, a special corporate income tax rate of five percent (5%) may be granted: Provided, further, That the total period of incentive availment shall not exceed forty (40) years.

"The Fiscal Incentives Review Board shall determine whether the benefits that the Government may derive from such investment are clear and convincing and far outweigh the costs of incentives that will be granted in determining whether a project or activity is highly desirable.

"The exercise by the President of his powers under this Section shall be based on a positive recommendation from the Fiscal Incentives Review Board upon its determination that the following conditions are satisfied:

"(1) The project has a comprehensive sustainable development plan with clear inclusive business approaches, and high level of sophistication and innovation; and

"(2) Minimum investment capital of Fifty billion pesos (P50,000,000,000.00) or its equivalent in US dollars, or a minimum direct local employment generation of at least ten thousand (10,000) within three (3) years from the issuance of the certificate of entitlement.

"Provided, That the threshold shall be subject to a periodic review by the Fiscal Incentives Review Board every three (3) years, taking into consideration international standards or other economic indicators: Provided, further, That if the project fails to substantially meet the projected impact on the economy and agreed performance targets, the Fiscal Incentives Review Board shall recommend to the President the cancellation of the tax incentive or financial support package or the modified period or manner of availment of incentives, after due hearing and an adequate opportunity to substantially comply with the agreed performance targets and outputs.

"For this purpose, financial support includes utilization of government resources such as land use, water appropriation, power provision, and budgetary support provision under the annual General Appropriations Act.

"This power of the President, in as far as it commands additional public sector expenditures in support of investors, is suspended during fiscal years when, an unimaginable fiscal deficit is declared by the President on the advice of the Development Budget Coordination Committee with a consequence that even core budgetary obligations, such as, but not limited to, mandatory revenue allotments for local government units and budget for the National Economic and Development Authority's core public investments program, cannot be fully financed.

"The President may, upon request of an Investment Promotion Agency, exempt the latter from the coverage of the provisions of title XIII of this Code with respect to the review and approval of applications for incentives, or modify the policy on thresholds for Fiscal Incentives Review Board approvals, pursuant to Section 297, should any of the following conditions exist:

"(A) When incentives system provided herein cause a significant, demonstrable, and attributable damage to the performance of an Investment Promotion Agency;

"(B) When it is reasonably evident that the incentives granted are no longer adequate, necessary, or appropriate;

"(C) When there is need to modify incentive privileges in the light of technological economic, and social changes; or

"(D) When there is need to redesign the tax incentive schemes to obviate unemployment and avoid economic and social dislocation:

"Provided, That the abovementioned request is approved by a majority vote of its governing board:

"Provided, further, That such request is supported by a cost-benefit analysis reviewed by the Fiscal Incentives Review Board, and other quantitative and qualitative evidence demonstrating the Investment Promotion Agency's performance:

"Provided, finally, That the Investment Promotion Agency shall abide by the incentives regime provided herein:

"Notwithstanding the provisions in the preceding paragraphs, tax and duty incentives granted through legislative franchises shall be excepted from the foregoing powers of the President to review, withdraw, suspend, or cancel tax incentives and subsidies.

"SEC. 302. Amendments to the Strategic Investment Priority Plan. - Subject to publication requirements and the criteria for investment priority determination, the Board of Investments may include additional areas in the Strategic Investment Priority Plan, alter any of the terms of the declaration of an investment area, and temporarily suspend projects or activities on the Strategic Investment Priority Plan if it considers that such project or activity is no longer a priority within the effectivity of the Strategic Investment Priority Plan.

"SEC. 303. Publication. - Upon approval of the Strategic Investment Priority Plan, in whole or in part, or upon approval of an amendment thereof, the Plan or the amendment, specifying and declaring the areas of investments shall be published in at least one (1) newspaper of general circulation or in the Official Gazette: Provided, That all such areas in the existing Strategic Investment Priority Plan shall be open for application until publication of an amendment or deletion thereof.

"SEC. 304. Qualifications of a Registered Business Enterprise for Tax Incentives. - In the review and grant of tax incentives, the registered business enterprise must:

"(A) Be engaged in a project or activity included in the Strategic Investment Priority Plan;

"(B) Meet the target performance metrics after the agreed time period;

"(C) Install an adequate accounting system that shall identify the investments, revenues, costs and profits or losses of each registered project or activity undertaken by the enterprise separately from the aggregate investments, revenues, costs and profits or losses of the whole enterprise; or establish a separate corporation for each registered project or activity if the Investment Promotion Agency should so require;

"(D) Comply with the e-receipting and e-sales requirements in accordance with Sections 237 and 237(a) of this Code; and

"(E) Submit annual reports of beneficial ownership of the organization and related parties."

"CHAPTER V

TAX INCENTIVE MANAGEMENT AND TRANSPARENCY

"SEC. 305. Filing of Tax Returns and Submission of Tax Incentives Reports. - All registered business enterprises and other registered entities whether taxable or exempt, are required to file their tax returns and pay their tax liabilities, on or before the deadlines as provided under the National Internal Revenue Code of 1997, as amended, using the electronic system for filing and payment of taxes with the Bureau of Internal Revenue: Provided, That for purposes of complying with their tax obligations, cooperatives and other registered entities, which do not have access to the electronic facilities, shall file with their respective revenue district offices.

"For registered business enterprises and other registered business enterprises and other registered enterprises availing of tax incentives administered by the Investment Promotion Agencies and other government agencies administering tax incentives, they shall file with their respective Investment Promotion Agencies or other government agencies administering tax incentives a complete annual tax incentives report of their income-based tax incentives, VAT exemptions and zero-rating, customs duty exemptions, deductions, credits or exclusions from the income base, and exemptions from local taxes, as provided under Section 294 of this Act and in the special laws of the concerned Investment Promotion Agency or other government agency administering tax incentives, and respective laws, and a complete annual benefits report which shall include data such as, but not limited to, the approved and actual amount of investments, approved and actual employment level and job creation including information on quality of jobs and hiring of foreign and local workers, approved and actual exports and imports, domestic purchases, profits and dividend payout, all taxes paid, withheld and foregone within thirty (30) calendar days from the statutory deadline for filing of tax returns and payment of taxes: Provided, That a copy of the report shall be simultaneously submitted to the Fiscal Incentives Review Board in electronic form.

"The Investment Promotion Agencies and other government agencies administering tax incentives shall, within sixty (60) calendar days from the end of the statutory deadline for filing of the relevant tax returns, submit to the Bureau of Internal Revenue, their respective annual tax incentives reports based on the list of the registered business enterprises and other registered enterprise, which have filed said tax incentives report: Provided, That the reportotial requirement under Section 3 of Republic Act No. 10963 or the TRAIN Law" shall be covered by this Section.

"The details of the tax incentives reports, as provided, in the preceding paragraphs, shall be provided in the implementing rules and regulations of this Act.

"The foregoing provisions shall be without prejudice to the right of the Bureau of Internal Revenue and the Bureau of Customs to assess and/or audit tax liabilities, if any, within the prescribed period provided in the National Internal Revenue Code of 1997, as amended, and Republic Act No. 10863, otherwise known as the Customs Modernization and Tariff Act, as amended, respectively."

"SEC. 306. Monitoring, Evaluation and Reporting of Tax Incentives. - Notwithstanding any law to the contrary, the Bureau of Internal Revenue and the Bureau of Customs shall submit to the Department of Finance: (a) all tax and duty incentives of registered business enterprises and other registered enterprises, as reflected in their filed tax returns and import entries; and (b) actual tax and duty incentives as evaluated and determined by the Bureau of Internal Revenue and the Bureau of Customs.

"The Department of Finance shall maintain a single database for monitoring and analysis of tax incentives granted.ℒαwρhi৷

"The Fiscal Incentives Review Board is mandated to systematically collect and store all tax incentives and benefit data from the Department of Finance, Investment Promotion Agencies, other government agencies administering tax incentives, registered business enterprises, and other registered enterprises, as well as to evaluate and assess the process, outcomes and impact of incentives granted to firms to determine whether agreed performance targets and intended results and outcomes are met.

The method of evaluation may include the conduct of cost-benefit analysis or other process and impact evaluation methods: Provided, That for purposes of this Act, the term cost-benefit analysis refers to the systematic evaluation of the total costs of granting tax incentives vis-a-vis the total benefits derived from the grant of tax incentives based on the annual tax incentive report, annual benefits report, and other related sources, to calculate the net benefit or cost associated with tax incentives.

"For purposes of monitoring and transparency, the Department of Finance shall submit to the Department of Budget and Management (DBM) a per firm and per registered project and activity data arranged on a sectoral and per industry basis: (1) the amount of tax incentives availed of by registered business enterprises and other registered enterprises; (2) the estimate claims of tax incentives immediately preceding the current year; (3) the programmed tax incentives for the current year; and (4) the projected tax incentives for the following year.

"The aforesaid data shall be reflected by the DBM in the annual Budget of Expenditures and Sources of Financing (BESF), which shall be known as the Tax Incentives Information (TII) Section: Provided, That the tax incentives information shall include a per firm data related to incentives availed of by registered business enterprises and other registered business enterprises based on the submission of the Department of Finance and the concerned Investment Promotion Agencies and other govenrment agencies administering tax incentives, categorized by sector, by Investment Promotion Agency or other government agency administering tax incentives, and by type of tax incentive: Provided, further, That the results of the cost-benefit analysis shall be published at the per firm level by the Fiscal Incentives Review Board and a report shall be submitted to the President and Congress on an annual basis.

"SEC. 307. Conduct of Impact Evaluation on Tax Incentives. - The Fiscal Incentives Review Board is mandated to conduct impact evaluation such as cost-benefit analysis on the investment and non-investment incentives on the Philippines economy and on the relevant sector.

"For this purpose, the Department of Finance, all heads of the Investment Promotion Agencies and other government agencies administering tax incentives shall submit to the Fiscal Incentives Review Board per firm and per registered project or activity level in a machine readable format:

"(1) Data on tax incentives based on the submission of registered business enterprises and other registered enterprises; and

"(2) Other investment and non-investment related data.

"A third party government institutions may conduct on its own or upon request of the Fiscal Incentives Review Board a peer review of the impact evaluation on the investment and non-investment incentives to determine the impact of the tax incentives on the Philippine economy and on the relevant sector: Provided, That for this purpose the Fiscal Incentives Review Board may provide anonymized firm-level data to the third party government institution, subject to a data sharing agreement.

"SEC. 308. Penalties for Noncompliance with Filing and Reportorial Requirements. - Any registered business enterprise or other registered enterprise, which fails to comply with the appropriate Investment Promotion Agencies or other government agencies administering tax incentives and/or, which fails to show proof of filing of tax returns using the electronic system for filing and payment of taxes of the Bureau of Internal Revenue under Section 305 hereof, shall be imposed the following penalties by the appropriate Investment Promotion Agency or other government agency administering tax incentives:

"(A) First (1st) Violation - Payment of a fine amounting to One hundred thousand pesos (P100,000.00);

"(B) Second (2nd) Violation - Payment of a fine amounting to Five hundred thousand pesos (P500,000.00); and

"(C) Third (3rd) Violation - Cancellation by the Fiscal Incentives Review Board of the registration of the registered business enterprise or registered entity with the Investment Promotion Agency or other government agency administering tax incentives.

"Provided, That if the failure to show such proof is not due to the fault of the registered business enterprises or other registered enterprises, the same shall not be a ground for the suspension of the Income Tax Holiday (ITH) and/or other tax incentives availment: Provided, further, That collections from the penalties shall accrue to the general fund.

"After due process, the Fiscal Incentives Review Board or the concerned Investment Promotion Agency, as the case may be, may cancel the registration, suspend the enjoyment of incentive benefits of any registered enterprise, and/or require refund of incentives and monetary penalties, for any material misrepesentation of information for the purpose of availing more incentives than what it is entitled to under this Code.

"Provided. That the Fiscal Incentives Review Board, with the recommendation of the Commissioner, may revoke or suspend incentives granted by an Investment Promotion Agency and/or order a business closure of a registered business enterprise that violates title VI (Excise Taxes on Certain Goods) and title X (Statutory Offenses and Penalties) of this Code and other related revenue regulations, orders, or issuances of the government: Provided, further, That such authority shall cover the acts of the registered business enterprise committed even in the first year of availment of incentives. Notwithstanding the provisions of this Section, the Department of Finance, the Bureau of Internal Revenue, and the Bureau of Customs shall retain their respective mandates, powers and functions as provided for under this Act and related laws.

"Any government official or employee who fails without justifiable reason to provide or furnish the required tax incentives report or other data or information as required under Sections 306 nd 307 of this Act shall be penalized, after due process, by a fine equivalent to the official's or employee's basic salary for a period of one (1) month to six (6) months or by suspension from government service for not more than one (1) year, or both, in addition to any criminal and administrative penalties imposable under existing laws."

"CHAPTER VI

TRANSITORY AND MISCELLANEOUS PROVISIONS

"SEC. 309.

Prohibition on Registered Activities. - A qualified registered project or activity under an Investment Promotion Agency administering an economic zone or freeport shall be exclusively conducted or operated within the geographical boundaries of the zone or freeport being administered by the Investment Promotion Agency in which the project or activity is registered: Provided, That a registered business enterprise may conduct or operate more than one qualified registered project or activity within the same zone or freeport under the same Investment Promotion Agency: Provided, further, That any project or activity conducted or performed outside the geographical boundaries of the zone or freeport shall not be entitled to the incentives provided in this Act, unless such project or activity is conducted or operated under another Investment Promotion Agency.

"SEC. 310. Establishment on One-Stop Action Center. - All Investment Promotion Agencies shall establish a one-stop shop or one-stop action center that will facilitate and expedite, to the extent possible, the setting up and conduct of registered projects or activities, including assistance in coordinating with the local government units and other government agencies to comply with Republic Act No. 11302, otherwise known as the Ease of Doing Business and Efficient Government Service Delivery Act of 2018: Provided, however, That the enterprises shall continue to avail of the one-stop shop facility notwithstanding the expiration of their incentives under this Code.

"SEC. 311. Investments Prior to the Effectivity of This Act. - Registered business enterprises with incentives granted prior to the effectivity of this Act shall be subject to the following rules:

"(A) Registered business enterprises whose projects or activities were granted only an income tax holiday prior to the effectivity of this Act shall be allowed to continue with availment of the income tax holiday for the remaining period of the income tax holiday as specified in the terms and conditions of their registration: Provided, That for those that have been granted the income tax holiday but have not yet availed of the incentive upon the effectivity of this Act, they may use the income tax holiday for the period specified in the terms and conditions of their registration;

"(B) Registered business enterprises, whose projects or activities were granted an income tax holiday prior to the effectivity of this Act and that are entitled to the five percent (5%) tax on gross income earned incentive after the income tax holiday, shall be allowed to avail of the five percent (5%) tax on gross income earned incentive based on Subsection (C); and

"(C) Registered business enterprises currently availing of the five percent (5%) tax on gross income earned granted prior to the effectivity of this Act shall be allowed to continue availing the said tax incentive at the rate of five percent (5%) for ten (10) years.