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Wednesday, August 16, 2006
Exporters face rough road in fight to import raw materials tax-free
TRADE Secretary Peter B. Favila has thrown the entire weight of the Department of Trade and Industry (DTI) in the struggle of the export sector to retain the only incentive they enjoy under Philippine laws, the importation of raw materials without any levy.
Favila has submitted to Senator Ralph Recto, chairman of the Senate ways and means committee, a DTI position paper with detailed proposed amendments to a draft anti-smuggling law prepared by Recto's committee.
Favila stood pat behind export industries in their clamor to keep their raw materials and spare parts imports duty-free.
Instead of the virtual closure of bonded warehouses through which the imported raw materials are coursed, the DTI proposed the inclusion of new provisions to the anti-smuggling law that classifies customs bonded manufacturing warehouses into different categories.
These will include garments and textile bonded warehouses to serve the needs of the second largest export industry in the Philippines, miscellaneous bonded manufacturing warehouses that serve imported parts and raw materials except garments, and common bonded warehouses that serve the import needs of small and medium exporters.
A fourth category will be industry specific bonded warehouses and those exclusively used by multinationals. The electronics, semiconductor and automotive parts industries are dominated by multinationals.
All sub-classified bonded warehouses are to enjoy duty-free privileges according to the Favila amendments.
Interviewed on the provisions detrimental to exports in the anti-smuggling bill, Philippine Exporters (Philexport) Confederation Inc. president Sergio R. Ortiz-Luis, Jr. said he will fight tooth and nail to get retain the tax-free importation of raw materials and parts.
"If we lose in the Senate, we will fight in the bicameral committee. If we lose there too, we will bring the matter to President (Gloria Macapagal-)Arroyo and ask for a line veto", Ortiz-Luis said, stressing that it is the only perk small exporters truly get. (Abe P. Belena/Philexport News and Features)
(August 16, 2006 issue)
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