ASEAN KEY DESTINATIONS
BOI sets review of MVDP
PHILIPPINES: The Board of Investments (BOI) has set the review of Executive Orders 156 and 887A or the Motor Vehicle Development Program (MVDP) that may include an audit of its participants and the possibility of extending incentives to entice more investments.
Supervising BOI Director for development service Ma. Corazon Halili-Dichosa said the review of these orders is mandated under the CARS (Comprehensive Automotive Resurgence Strategy) Program.
Dichosa has made known of the BOI’s moves during the initial meeting of the newly formed Motorcycle Technical Working Group, which created four sub-clusters working groups. One subcluster was tasked have to provide inputs for the MVDP review.
The Motorcycle Development Program is one of the pillars of the MVDP that also includes the Cars Development Program and the Commercial Vehicle Development Program.
Dichosa also informed the motorcycle players that part of the review is an upcoming audit of companies commencing in the second semester of this year.
There are no specifics yet as what will be covered in the audit of companies, but Dichosa made assurances that players will be consulted on the audit forms and mechanisms to be used.
The MVDP review has been mandated under EO 182 or the CARS Program, which created the Inter-Agency Committee on Automotive Industry Development to administer and implement the CARS Program chaired by the Department of Trade and Industry (DTI) with members from the Departments of Finance, Transportation and Communication, Science and Technology, National Economic and Development Authority, and the Technical Education and Skills Development Authority. The co-chairman is the Industry Development Council and the National Competitiveness Council.
The EO provides that the constituted Inter-Agency Committee will review the existing MVDP and other relevant incentives schemes. The review, which should be completed within six months from the issuance of the EO, may explore the possibility of providing for new entrants intending to eventually participate in the CARS program a set of incentives during a limited transition period.
Most of the local car companies are participants in the MVDP, which was amended under EO 877A and was among the last orders signed by then President Gloria Arroyo before she stepped down from office in June 2010.
There are no income tax holiday privileges for MVDP participants, although they are entitled to the availment of tariff rates for KD parts and components for assembly under the MVDP tariff lines of the Tariff and Customs Code.
Investments for motor vehicle assembly and/or manufacture of parts and components manufacture are listed in the annual Investments Priorities Plan, making such investments eligible to tax perks.
EO 877A, however, was not implemented during DTI Secretary Gregory L. Domingo’s term as he instead concentrated on hammering out an entirely new program that will fully revive the car industry. Thus, after over three years in the making, the CARS Program was born.
The CARS Program’s implementing rules and regulations was only approved in December 2015, just in time for Domingo’s departure as DTI chief. The program grants $600 million to three car brands that can produce 200,000 units each of new vehicles over a six-year period.
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