The Board of Investments has endorsed the bid of consumer goods manufacturer Unilever Philippines Inc. to qualify for more tax incentives under the Inclusive Business program, after committing to obtain its raw materials from the country and invest another $120 million to generate jobs.
The BoI, with the help of the Asian Development Bank, introduced last year the Inclusive Business program, which offers better incentives to companies that will set up their operations in poor areas.
Unilever Philippines, the local unit of the British consumer goods manufacturer, became one of the first companies to apply for the IB program, as it committed to secure 100 percent of agricultural requirements for food products from the local market by 2020.
Among the incentives considered under the IB program are income tax holiday of four to eight years, zero import duties on capital equipment and simplified business procedures.
Documents filed with the BoI showed Unilever would get all its agricultural needs for production “sustainably by 2020 and may be candidate for IB accreditation.”
Under the IB program, BoI will develop accreditation criteria for the three sectors of agribusiness, housing and tourism. Each sector will be entitled for support programs.
BoI plans to accredit at least 20 IB projects under each sector. The IB initiative was also included in the 2014 Investment Priorities Plan guidelines.
The 2014 IPP general policy encourages registered enterprises to adopt IB strategy that provides goods and services, income and decent work opportunities for the low-income segment of the society within the enterprise’s supply or value chain directly contributing to the improvement of living standards and poverty reduction.
ADB will provide technical assistance through its consultants to help the BoI craft the IB accreditation scheme that was launched in September 2014.
Unilever’s local sourcing of ingredients for its food line up is a part of the company’s $120-million expansion project, which aims to increase production capacities and capabilities across all product categories.
Under a pioneer status, the project will be entitled to six-year income tax holiday plus two bonus years depending on compliance of some requirements such as exports commitments.
BoI also grants duty-free privilege on capital equipment importation.
About 30 percent to 35 percent of Unilever’s expansion will center on local production for food ingredients as well as improvements on packaging.