MALACAÑAN PALACE
MANILA
BY THE PRESIDENT OF THE PHILIPPINES
[ EXECUTIVE ORDER NO. 313, May 01, 2004 ]
MODIFYING THE RATE OF DUTY ON CAPITAL EQUIPMENT, SPARE PARTS AND ACCESSORIES IMPORTED BY BOARD OF INVESTMENT (BOI) REGISTERED NEW AND EXPANDING ENTERPRISES
WHEREAS, the Government is committed to encouraging investment in preferred areas of activity;
WHEREAS, enterprises located within economic zones and freeports are currently enjoying duty exemption on the importation of machinery and equipments, spare parts and accessories, which is not available to BOI-registered enterprises;
WHEREAS, One of the major cost items of business enterprises in their start up operations is the cost of imported machinery and equipment, spare parts and accessories;
WHEREAS, reducing the duties on the importation thereof will make the Philippine more attractive to investors in the face of an increasing competitive Asian market for foreign direct investments;
WHEREAS, Section 401 of the Tariff and Customs Code of the Philippines empowers the President of the Philippines, upon the recommendation of the National Economic and Development Authority, increase, reduce or remove existing protective rates of import duty;
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby order:
Section 1. Any importation of machinery and equipment, spare parts and accessories by enterprises registered with the BOI, except those covered under the Motor Vehicle Development Program, shall be subject to zero and one percent (1%) duty, as indicated in Section 2 hereof.
Section 2. The zero and one percent (1%) duty on articles, equipment, spare part and accessories classified under Chapter 40, 59, 68, 69, 70, 73, 76, 82, 83, 84, 85, 87, 89, 90, 91 and 96 of the Tariff and Customs Code of the Philippines shall be granted to BOI-registered new and expanding export- and-domestic-oriented enterprises, respectively, upon the issuance by the BOI of the Certificate of Authority; provided that the importation of machinery and equipment, spare part and accessories shall comply with the following conditions:
a) They are not manufactured domestically in sufficient quantity, of comparable quality and its reasonable prices;
b) They are reasonably needed and will be used exclusively by the enterprise in its registered activity, unless prior approval of the BOI is secured for the part-time utilization of said equipment in a non-registered activity to maximize usage thereof or the proportionate taxes and duties are paid on the specific machinery and equipment, being permanently used for non-registered activities; and
c) The approval of the BOI was obtained by the registered enterprises for the importation of such machinery and equipment, spare part and accessories.
Section 3. The registered enterprise cannot sell, transfer or dispose the aforementioned machinery and equipment, spare part and accessories without prior BOI approval within five (5) years from date of importation. Otherwise, the registered enterprise will be solidarily liable with the buyer or any other transferee to pay twice the amount of the duly exemption without prejudice to other applicable penalties under Executive Order (EO) No. 226.
Section 4. The Board of Investments, in coordination with the Department of Finance, the National Economic and Development authority, and the Bureau of Customs shall promulgate the implementing rules and regulations governing the implementation of this EO.
Section 5. All presidential issuances, administrative rules and regulations or parts thereof, which are inconsistent with this EO are hereby evoked or modified accordingly.1a⍵⍴h!1
Section 6. This EO shall take effect thirty (30) days following its complete publication in two (2) newspapers of general circulation in the Philippines and shall be availed of for a period of two (2) years from the date of effectivity.
Done in the City of Manila, this 1st day of May in the year of Our Lord, Two Thousand and Four.
(SGD.) GLORIA MACAPAGAL-ARROYO
President of the Philippines
By the President:
(SGD.) ALBERTO G. ROMULO
Executive Secretary
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