MANILA, Philippines — President Rodrigo Duterte has extended by three years the grant of zero percent duty on capital equipment by enterprises registered under the Board of Investments (BOI) to make the Philippines more attractive to investors.
The extension is contained in Executive Order (EO) No. 85 signed by the president last July 19.
The government started granting zero percent duty on certain articles imported by BOI-registered new and expanding enterprises last year through EO No. 57.
Under the previous EO, the zero percent duty lasted for one year from the date of its effectivity or until the enactment of a law amending the Omnibus Investments Code of 1987, whichever comes earlier.
The new EO shall be valid for three years or until a law amending the investments code is enacted, whichever comes earlier.
Duterte said the importation of capital equipment remains as one of the major cost burdens of business enterprises in their start-up and expansion.
"There is a need to again extend the grant of zero percent duty on capital equipment, spare parts and accessories, currently being enjoyed by BOI-registered enterprises," the president said in the order.
"The grant of duty-free importation of capital equipment remains to be an important fiscal incentive in promoting investments into the Philippines considering the global competition for foreign direct investments," he added.
The extension, Duterte claimed, would also enhance the attractiveness of the Philippines as an investment destination and improve industry competitiveness.
Capital equipment, spare parts and accessories imported by BOI-registered new and expanding enterprises will enjoy zero percent duty if they are not manufactured domestically in sufficient quantity, of comparable quality and at reasonable prices and if they are reasonably needed and are used exclusively by the enterprise in its registered activity.
The BOI-registered enterprise cannot sell, transfer or dispose of the equipment and articles within five years from the date of importation without prior approval of the BOI.
Enterprises who fail to comply with the requirement will have to pay twice the amount of the duty foregone or P500,000 whichever is higher without prejudice to other applicable penalties.
The National Economic and Development Authority Board endorsed the extension of the zero percent duty on imports by BOI-registered new and expanding enterprises last month.