The Board of Investments (BoI) and Clark Development Corp. (CDC) are signing a memorandum of agreement allowing on an interim basis new locators in Clark Special Economic Zone to register with the BoI and avail its incentives until the incentives issue is finally settled.
Trade and Industry Secretary Elmer C. Hernandez, also BoI managing head, said the interim arrangement was agreed upon since the CDC will no longer grant incentives until the Supreme Court will settle the issue or a new law is passed.
According to Hernandez, there is no double availment of incentives.
The scheme is that the investor will just have to comply to the requirements of the BoI. If it is a Filipino-owned firm, the company has to export 50 percent of its production and 70 percent if foreign-owned.
The difference in the firm does not have the option for the 5 percent tax on gross income but it can avail of the income tax holiday incentive.
Zero duty for capital equipment only for exports but pay VAT. For its raw materials, the BoI registered firm will be slapped with the normal duty plus the VAT although it can avail of a duty drawback and VAT refund once it starts exporting.
Hernandez said the same arrangement was entered upon between the BoI and the Subic Bay Metropolitan Authority.
For those who decide to transfer its registration from CDC to the BoI, Hernandez said the transferee shall only be accorded the remaining incentives that it had availed of from CDC.
Hernandez said the MOA is going to be signed soon to erase whatever problems being faced by locators of CDC particularly financial disclosures of American firms to their home country.
It could be recalled that the SC had stripped CDC the power to grant incentives to locators similar to what the Subic Bay Metropolitan Authority has given to its investors in the Subic Freeport. (BCM)
