Extension of duty-free equipment imports sought

The Board of Investments has sought the extension of the duty-free importation of capital equipment, spare parts and accessories, which one-year extension expired in June this year.

The Tariff Commission has already scheduled for a public hearing and submission of comments and position papers on the BOI petition.

Extension of the duty-free import privilege for BOI-registered enterprises will involve tariff modification under Section 1608 (b) of the Customs Modernization and Tariff Act (CMTA).

The public hearing will determine the impact of tariff policies and programs on national competitiveness and consumer welfare in line with the economic objects of the government.

The previous one-year extension of the zero percent duty importation, contained in Executive Order (EO) No. 57, aims to further enhance industry competitiveness in line with the Philippine Development Plan 2017 to 2022.

“Considering that importation of capital equipment remains as one of the major cost burdens of business enterprises in their start-up and expansion, there

is a need to extend the zero percent duty on capital equipment, spare parts and accessories currently being enjoyed by BOI-registered enterprises,” the presidential order read.

“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,” it added.

Once extended for another year, the zero percent duty shall be applied to importations by BOI-registered new and expanding enterprises of capital equipment, spare parts and accessories upon the BOI issuance of a certificate of authority.

The imported capital equipment must comply with conditions, such as they are not manufactured domestically in sufficient quantity, of comparable quality, and at reasonable prices; and they are reasonably needed and will be used exclusively by their enterprise in its registered activity.

The companies are also prohibited from selling, transferring or disposing the imported equipment without prior BOI approval within five years from the date of importation.

Otherwise, they will be made to pay twice the amount of the foregone duty or 1 500,000 whichever is higher without prejudice to other applicable penalties.