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BOI open to extend CARS deadline

By BERNIE CAHILES-MAGKILAT

The Board of Investments (BOI) has expressed openness to extending the compliance period for participants in the Comprehensive Automotive Resurgence Strategy (CARS) Program without touching the volume requirement.

Ceferino Rodolfo

Ceferino S. Rodolfo

BOI Managing Head Ceferino S. Rodolfo said this in light of the temporary halt in production of the CARS Program participants during the Enhanced Community Period.

CARS Program participants are required to produce 200,000 units of the enrolled car model over a six-year period. Tax incentives are granted to the participant’s investments in fixed equipment and machinery and production volume.

Rodolfo said there is no talk to relax the requirements, but added, ”If at all, they will be given longer time to comply with volume target. That is the only thing that we’ve discussed.”

He, however, acknowledged the difficulty of program participants and the entire automotive industry as their operation and production have been halted during the more than two months of lockdown.

“I am not hopeful they can reach the volume target” within the six-year time frame. Unable to hit the target also means the participant cannot also avail of the full tax incentives, Rodolfo stressed.

Earlier, TMP Vice-President Rommel Gutierrez said that its plant operation in Laguna was halted for more than 2 months due to the lockdown, affecting the production for CARS program.

“Adjustments will have to be made as far as volume requirement is concerned,” said Gutierrez.

The company has already started producing VIOS at its Sta. Rosa, Laguna plant, but Gutierrez did not reply to query as to how many units they have produced so far.

In 2017, TMP announced an initial investment of P5.2 billion as part of its commitment to the program. The investment was used to put up a state-of-the-art plastic injection facility in its Santa Rosa plant, along with the expansion of its press parts facility and introduction of new hemming technology.

In exchange for the investment, registered participants may be entitled to two kinds of fiscal support: fixed investment support, and production volume incentive.

The BOI is still looking into the jeepney modernization program of the government especially that the Department of Transportation has announced of higher subsidy for the program.

If ever, the jeepney modernization program would become the third participant in the CARS Program, which encourages local production, including parts and assembly of a motor vehicle. The CARS Program was designed for three participants, but it only attracted two players.

There are an estimated 80,000 to 160,000 jeepneys up for modernization and replaced with modern jeepneys using cleaner fuel.


Source: Manila Bulletin (https://business.mb.com.ph/2020/06/21/boi-open-to-extend-cars-deadline/)

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