Implement incentive law, Noy, DOST urged

MANILA, Philippines - President Aquino and the Department of Science and Technology (DOST) have been asked to fully implement Republic Act No. 7459, the Inventors and Incentive Act of the Philippines.

Signed in 1992, the law gives incentives, mainly tax exemptions to inventors and innovators and their products.

Bormeo Modanza, Filipino Inventors Society (FIS)  president, said Filipino inventors have been deprived of the benefits under the law since the DOST and the Bureau of Internal Revenue (BIR) have failed to comply and apparently disregarded it.

“They are invoking a supposed legal opinion issued by Malacañang during the time of (President) GMA (Gloria Macapagal-Arroyo) which supposedly says that the exemption is only for income taxes,” he said.

Modanza said RA 7459 is clear that inventors are eligible for tax exemptions on “any income derived from these technologies” that they have developed.

“Effectively, they are violating the law,” he said.

“Or misinterpreting the law to the disadvantage of Filipino inventors.” 

Modanza said Section 6 states that tax exemptions are awarded to promote, encourage, develop and accelerate commercialization of technologies that local researchers have developed or have adopted from foreign sources including inventions.

“Any income derived from these technologies shall be exempted from all kinds of taxes during the first 10 years from the date of the first sale, subject to the rules and regulations of the Department of Finance: provided, that this tax exemption privilege pertaining to invention shall be extended to the legal heir or assignee upon the death of the inventor,” he said, quoting the law.

The FIS and the FIS Producer Cooperative (FISPC)  held yesterday the closing ceremonies of a joint strategic planning seminar workshop at the FISPC showroom at the Delta Building at the corner of Quezon and West Avenues in Quezon City.

Francisco Pagayon, FISPC chairman, said RA 7459 limited the tax exemption benefit to 10 years to help inventors during the initial years of the manufacture and commercialization of their inventions and products.

“The tax exemption benefit is reasonable, it’s only for the first 10 years of an invention’s commercialization,” he said.

Pagayon said the early years of an invention’s manufacture and distribution are challenging years during which they need such tax exemptions.

“The manufacture of our inventions into commercial products generate jobs for hundreds, if not thousands of Filipinos, but at the same time, it also entails huge capital investments and every cent counts to make our operations profitable for us inventors,” he said.