The Department of Trade and Industry targets to issue by mid-July the implementing rules and regulations (IRR) that will govern the Comprehensive Automotive Resurgence Strategy (CARS) Program.
The IRR will enable the government to roll out the incentives under the vehicle industry roadmap in early 2016.
Trade Undersecretary Adrian S. Cristobal Jr. said the DTI was not expecting any problem in meeting the target for issuance of the IRR.
“The target publication of the IRR is 45 days from the publication of (Executive Order No. 182). The budget for the program will be included in the General Appropriations Act for 2016,” said Cristobal, who also serves as the managing head of the Board of Investments.
He said P4.5 billion was expected to be appropriated in next year’s budget. This represents the amount of incentives that will be provided to qualified participants in the CARS Program.
Under EO 182, the Department of Budget and Management (DBM), in coordination with the BOI, will propose, through the National Expenditure Program, the inclusion of an Automotive Development Fund (ADF) in the annual General Appropriations Act (GAA), to fund the fiscal support for registered and eligible participants.
The DBM will indicate in the annual National Expenditure Program the annual estimated expenditure necessary to support the CARS Program for that year, until the amount of P27 billion is fully used.
The said fiscal support will come in the form of non-transferrable Tax Payment Certificates (TPC) that participants can use to cover their tax and duty obligations to the government, such as excise tax, income tax, import duties, and value added tax.
Under the CARS program, the government will offer as much as P27 billion worth of time-bound and performance-based fiscal incentives, that will support new investments in fixed capital expenditures in new parts making capability and to encourage large scale production in vehicle assembly.