MANILA President Rodrigo R. Duterte has signed an executive order, extending the zero-percent duty on capital equipment, spare parts and accessories imported by Board of Investments-registered new and expanding enterprises.
Under EO No. 57 signed by the President on June 22, the duty-free importation will be extended to one year until the enactment of a law amending EO No. 226 (s.1987), otherwise known as the Omnibus Investments Code of 1987.
The one-year period of the previous EO (No. 22) expired on May 18, 2018.
Considering the importation of capital equipment remains as one of the major cost burdens of business enterprises in their start-up and extension, there is a need to extend the zero-percent duty on capital equipment, spare parts and accessories currently being enjoyed by BOI-registered enterprises, stated in the new EO.
The extension of the zero-percent duty importation is seen to enhance the industry competitiveness in line with the Philippine Development Plan 2017-2022.
The grant of duty-free importation remains to be an important fiscal incentive in the promotion of investments particularly foreign direct investments into the Philippines
Under Customs Modernization and Tariff Act, the President is empowered to increase, reduce or remove existing rates of import duty upon recommendation of the National Economic Development Authority (NEDA).
The order, however, prohibits the new and expanding enterprises to sell, transfer or dispose the capital equipment, machinery, spare parts and accessories without approval from BOI within five years from the date of importation.
In case of violation, the BOI-registered enterprises will have to pay the amount of the duty foregone or PHP500,000, whichever is higher without prejudice to other applicable penalties. (PNA)
Source: Philippine News Agency