New order issued for equipment duty perks
INVESTMENT TRIP President Duterte speaks prior to his departure for the Boao Forum in China in April to draw more investments to the Philippines.—MALACAÑANG PHOTO
Despite the objections of the Department of Finance, Malacañang issued an executive order extending the 31-year-old investment incentive allowing the duty-free importation of capital equipment, machine parts and accessories by qualified companies.
Malacañang on Friday released Executive Order No. 57, signed by acting Executive Secretary Michael Ong on June 22, which extended for one year the incentive for companies registered with the Board of Investments (BOI).
The measure, which will take effect after publication in a newspaper of general circulation, was aimed at enhancing competitiveness in line with the Philippine Development Plan 2017 to 2022.
Validity
It will be valid for one year or until a law amending Executive Order No. 226, or the Omnibus Investments Code of 1987, was enacted.
The new executive order noted the need to extend the zero-percent duty on capital equipment, machine parts and accessories “considering that importation of capital equipment remains as one of the major cost burdens of business enterprises in their startup and expansion.”
“The grant of duty-free importation of capital equipment remains to be an important fiscal incentive in promoting investments in the Philippines considering the global competition for foreign direct investments,” the measure added.
The new EO was issued after Executive Order No. 22, also on the same importation privilege, expired on May 18, a year after it was issued.
Conditions
Under EO 57, the duty exemption will apply to importation by BOI-registered new and expanding enterprises of capital equipment, machine parts and accessories.
This is upon the BOI’s issuance of a certificate of authority.
The registered companies cannot sell, transfer or dispose of the imported equipment within five years from the date of importation without approval from the BOI.
Should they insist on doing so, the company will be required to pay twice the amount of the foregone duty, or P500,000, whichever is higher.
