BOI reviewing Toyota PH CARS localization rate (Sabong News)
Author
Bernie Cahiles-Magkilat
Date
APRIL 03 2022
The Board of Investments (BOI), which is administering the incentive-driven Comprehensive Automotive Resurgence Strategy (CARS) program, is evaluating the various bills of materials (BOMs) submitted by Toyota Motor Philippines Corp. (TMPC) to determine the localization rate that will serve as basis on the amount of tax incentives that can be granted to the carmaker.
CARS Program Manager Marissa Concepcion said the BOMs generated by TMPC over the past 30 months leading to the production of Vios, its enrolled car model in the program, will tract the level of parts localization, which is determinant in the amount of Production Volume Incentive (PVI).
PVI accounts for 60 percent or P5.4 billion of the P9-billion maximum tax perks that a participating car maker (PCM) can avail under the program for the production 200,000 units of its enrolled car model.
Under the program, a PCM can start availing of the PVI once its production volume has exceeded 100,000 units.
This means a PCM has the potential of getting P5.4 billion or P27,000 per unit through tax payment certificates (TPC) if it has achieved 100 percent localization rate.
But Concepcion said it is unlikely for a PCM to achieve 100 percent localization or local parts content. She expects at least 80
percent localization rate of PCMs.
“PCM is not expected to get the maximum as it is based on attainment of 100 percent localization which is unlikely,” said Concepcion. This means, a PCM could only get 80 percent of P27,000 per unit incentive at 80 percent localization rate.
In reviewing the BOMs, Concepcion said, they will check two very important factors.
One is to verify that what is claimed by the PCM to be local is indeed local (not local purchase but imported origin).
Second is to check hi-tech parts that cannot be localized and therefore not part of the logistics efficiency index (LEI) computation.
“Once the BOMs are accepted, the computation is done automatically by an online facility system set up for CARS.
Hopefully, we can get Inter Agency Committee/BOI Board approval within this quarter,” Concepcion said.
And as soon as the credit is approved, Concepcion said the TPC is issued in real time or when needed. The TPC can be issued within 24 hours from filing of request.
The TPC can be used to pay the Bureau of Customs for taxes and duties on any importation by the PCM. It can also be used to pay for taxes at the Bureau of Internal Revenue, depending on the amount payable.
The TCP is not convertible to cash, not transferable, and cannot be sold.
