Permit holders will be allowed to import SKDs on a limited scale — BOI

The Board of Investments (BOI) will allow local firms that had been able to bring in and assemble some semi-knocked down (SKD) units to reexport them, if they will not be able to fulfill the other commitments tied to the SKD import authority.

The three firms that could be affected by the BOI’s new policy on SKD imports are Norkis Automotive Resources Corp. (NARC), Proton Pilipinas Corp. (PPC) and Columbian Motors Corp. (CMC).

Trade and Industry Secretary Manuel Roxas II said the three car firms that had earlier gotten approval from Malacañang for their SKD Imports could still go ahead as long as they also fulfill their commitment to put up facilities within 18 months to eventually assemble completely-knocked down (CKD) units and ensure value-added local content.

There would be no extension of the authority to import.

The SKD imports were allowed on the claim of the three car firms that they would initially test the market for what would be the best model to eventually assemble locally.

However, Roxas said, if the three car firms will not be able to fulfill their commitment, government would allow them to reexport already assembled units to China, Hong Kong or other markets.

If any of the three firms sell their assembled SKD unit locally, Roxas said, they must compensate the government for the difference in taxes between the SKD units which paid a preferential tariff rate of just three percent as against the 30-percent tariff imposed on completely built-up (CBU) units.

The BOI Board had ruled last May 10 to reject all new applications for SKD imports.

The privilege to import SKD units was revoked on April 8, 1998 on the ground that there is already a viable Motor Vehicle Development Program wherein participants are locally assembling CKDs. – Marianne Go