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.
The extension is contained in Executive Order No. 85 signed by the President on July 19, copies of which were sent to Palace reporters Wednesday.
Based on the order, the grant of duty-free importation of capital equipment is an important fiscal incentive in promoting investments in the country.
The zero percent duty, as stated in the document, will be granted to capital equipment, spare parts and accessories imported by new and expanding enterprises given that these were not manufactured domestically in sufficient quantity, of comparable quality and at reasonable prices.
The extension was given amid the global competition for foreign direct investments, according to the order.
It is expected to enhance the attractiveness of the Philippines as an investment destination and improve industry competitiveness.
Last year, the government has also granted zero percent duty on certain articles imported by BOI-registered new and expanding enterprises through EO No. 57.
It lasted for one year from the date of its effectivity.
The new order is valid for three years or until a law amending the investments code is enacted.
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.