Duterte extends duty-free imports of capital equipment, spare parts

President Duterte has issued an executive order (EO) that retains the zero duty on capital equipment, spare parts and accessories imported by new and expanding enterprises registered at the Board of Investments.

The new EO replaced EO 22, which provided the zero percent duty on certain articles imported by the BOIregistered new and expanding enterprises for a period of one year but expired last May 18, while a law amending the Omnibus Investments Code of 1987 remains to be enacted.

Under EO 52, Malacañang said the extension of the zero percent duty importation would further enhance industry competitiveness in line with the Philippine Development Plan 2017-2022.

The EO came as the administration continues to bank on the Build Build Build infrastructure projects to boost economic development in the country.

“Whereas, considering that importation of capital equipment remains as one of the major cost burdens of business enterprises in their startup and expansion, there is a need to extend the zero percent duty on capital equipment, spare parts and accessories currently enjoined by BOI-registered enterprises,” the new EO said.

The grant of duty-free importation of capital equipment remains an import fiscal incentive in promoting investments into the Philippines, considering the global competition for foreign direct investments.

It also pointed out that Section 1608 of Republic Act 10863, otherwise known as the Customs Modernization and Tarrif Act (CMTA), empowers the President of the Philippines, upon the recommendation of the National Economic and Development Authority, to increase, reduce, or remove existing rates or import duty.

On April 25 this year, the NEDA Board endorsed the extension of the zero percent duty on capital equipment, spare parts and accessories by BOI-registered new and expanding enterprises.