MANILA, Philippines - The government said yesterday they will come up with an executive order to extend the tax credit given to local auto manufacturers.
Board of Investments (BOI) managing head Cristino L. Panlilio said that they will re-issue the tax credit to local auto manufacturers to encourage vehicle exports.
Currently only Ford Motor Group sells locally manufactured vehicles outside of the Philippines.
Panlilio also said that there are major changes in the implementing rules and regulations (IRR) of the Comprehensive Motor Vehicle Development Plan (CMVDP).
Panlilio said that the IRR will only provide a general framework. The incentives and other sweeteners will be passed by the Auto Council. The 13-man auto council will be composed of four members from the private sector and nine members from the government.
Panlilio said that the incentives and stimulus package of the government comes in three main forms. These are tax credit, income tax holiday and incentives from the Philippine Economic Zone Authority (PEZA).
Earlier, BOI executive director Efren Leano said they are looking for ways to make the Philippines a more attractive investment site.
“We are looking for ways wherein we can help the industry but the policy must not need congressional approval in order for the changes to be immediately implementable,” Leano said.
In a separate interview, Toyota Motor Philippines (TMP) executive vice president Rommel Gutierrez refused to say if a tax credit will be enough for them to increase their production in the Philippines. They also said they have not yet given any list of demands to the BOI.
Leano said that they will have to present the issue of the tax credit to the Department of Finance because it means foregone revenue for the government. “Of course there is a trade off. We give them tax credits in exchange for an increase in locally produced cars that will in turn lower the price of vehicles.”