Aside from six-year ITH, the other perks sought by the EE sector also include duty-free importation of capital equipment, “to help improve the commercial viability of ESCO and third party investments in EE equipment assets installed in commercial, industrial, transport and government facilities.”
An ESCO is a business that provides wide range of energy efficient solutions – including designs and implementation of energy savings projects, retrofitting, energy conservation, energy supply and risk management as well as energy infrastructure outsourcing.
Ablaza said “the EE guidelines should be able to mitigate the capital investment, technology, financing and credit risks associated with ESCO investments in EE equipment assets installed in premises that the ESCOs neither own nor lease.”
PE2 qualified that “ESCO investments should not be likened to BOI-registered modernization projects implemented by manufacturers and agribusinesses.”
Instead, the group noted that “income tax holidays for ESCO investments should clearly exceed the number of years wherein the ESCO projects remain in the red with net operating losses;” emphasizing then that “for this reason, the 4-year income tax holiday would clearly be inadequate.”
Ablaza pointed out “the final EE guidelines should be able to attract local and foreign investments in this new asset class called energy efficiency.”
He further explained “it is vital that portfolio investors of energy efficiency projects are able to gain long-term certainty on the magnitude and availability of tax-based fiscal incentives.”
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