As an economic zone, it can avail of duty-free privileges for the importation of raw materials. On the other hand, BOI-registered companies can avail of additional duty and/or tax incentives for imported capital equipment as well as income tax holidays.
While it enjoys certain privileges under the economic zone scheme, Global Steel Works International Inc. (National Steel’s new corporate name) cannot avail of incentives offered by the BOI as it is not registered as an export-oriented company.
This has prompted government to review the incentive scheme for privatized government corporations, industry sources revealed.
The Indian-dominated steel firm does not enjoy privileges under Executive Order (EO) 226 or the Omnibus Investments Code. Likewise, it does not qualify for incentives under the Iron and Steel Industry Act or Republic Act (RA) 7103.
Under EO 226, Global Steel Works must be classified as "pioneer status" and meet the 70-percent maximum export requirement. And RA 7103 incentives can only be granted if the company is 35-percent Filipino controlled.
Global does not qualify under pioneer status, and it is 100-percent controlled by its parent company based in India.
It is reportedly investing an additional P1.57 billion for its planned export project which is expected to generate nearly $290 million, with Thailand, Malaysia, and mainland China as its primary targets.
The steel company hopes to produce 1.5-million metric tons of steel products including hot rolled coils, cold-rolled coils and tin plates.