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MANILA, Philippines – The government has failed to renew in time the duty free importation of capital equipment for Board of Investments (BOI) registered firms which may mean that some investors may hold off activity until the zero duty is re-imposed.
Trade and Industry Secretary Gregory L. Domingo said the executive order allowing for duty free importation expired last July 14, and a new order to replace it has not been issued. This means that from July 15 until a new order is issued, firms must pay duties for capital equipment, Domingo said.
An executive order cannot be issued because Congress is currently in session. Malacañang must wait for the next recess before it can issue the order. “Hopefully this is only for a short period of time,” Domingo, who is also the chairman of the BOI, said.
Domingo explained that there were last minute changes in some categories that will be given duty free importation. In the past, Domingo said that headings were mentioned. This he said was too broad which is a potential loophole. Domingo said they decided to be more stringent and use the subheadings in order to clearly define the exemption.
“It was a potential loophole. If there were those that were able to go around the law this will lessen it,” Domingo said in Filipino.
He said they have finished crafting the inclusions. It will be submitted to the NEDA board for approval before it can be sent to Malacañang for signing.
Meanwhile, Domingo said the gross domestic product (GDP) growth is likely to be lower in the second quarter compared to the 7.5-percent recorded in the first quarter of the year. Domingo noted that there was a delay in government spending for the first half but agencies have promised that they will catch up during this semester.
He said the economic performance in the second half will be very strong especially since Public Private Partnership (PPP) projects are expected to take off soon.
Prices are expected to remain stable. Domingo, who was at the Kapihan sa Diamond Hotel yesterday morning, said the value added tax on toll will have no impact on commodity prices because transportation cost is a small component of the entire cost.
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By: Ma. Elisa P. Osorio
Source: The Philippine Star, Aug. 2, 2011
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