MANILA — The Board of Investments (BOI) aims to extend the period of providing incentives for capital equipment to five years, which is the usual validity period for giving these perks since the Omnibus Investments Code of 1987 or Executive Order (EO) No. 226 took effect.
BOI bats for this extension after President Rodrigo Duterte signed last April 28 the EO No. 22, which only provides one-year period of zero-duty on capital equipment, spare parts, and accessories importation by BOI-registered firms.
It was the first time that the government only gives a one-year period for capital equipment incentives, the BOI Investment Policy and Planning Service (IPPS) said.
The BOI pushes for extending the capital equipment incentives as the EO 22 will expire on May 18, 2018.
Upon expiration of the EO, capital equipment, spare parts, and accessories that will be imported by BOI-registered firms will be slapped with their respective tariffs.
It was noted in the EO 22 that providing zero tariff on capital equipment, spare parts, and accessories remains to be a vital fiscal incentive to attract foreign investments as well as enhancing the industrial competitiveness of the country, which is in line with the Philippine Development Plan 2017-2022.
The EO also considers inward shipment of capital equipment as one of the major cost burdens to businesses in starting their operations here, or for their expansion.
Moreover, the BOI pushes for transposing the product coverage from ASEAN Harmonized Tariff Nomenclature (AHTN) 2012 to AHTN 2017 for trade facilitation.
EO 22 covers 17 Chapters as product coverage for duty-free importation.
The BOI has presented its position during a public hearing at the Tariff Commission early this month.
It will also present the proposed extension of capital equipment incentives to the Techincal Committee on Tariff and Related Matters. (PNA)