Rohm units get tax break for P5-B expansion projects

Government has granted the local subsidiaries of Japan’s electronics giant Rohm Apollo Electronics Co. Ltd. a five-percent gross income tax incentive for their P5-billion expansion projects after the electronics firm threatened to pull out of the country.

Trade and Industry Secretary Manuel Roxas II said that the Philippine Economic Zone Authority (PEZA) had decided to approve Rohm’s request for a tax incentive "in line with the government’s goal of creating more jobs and raising income, and the growth of export-oriented, high technology industries."

The three local subsidiaries of Rohm are undertaking expansion projects seen to create 2,660 new jobs over the next five years and more than double the electronics firm’s present workforce of 1,950 to 4,550 by the year 2005.

Roxas defended the grant of the tax incentive by saying that "we must look at the multiplier effect that the new direct jobs that Rohm’s expansion will open up, in so far as the additional employment for Rohm’s suppliers and contractors, and other collateral jobs which will benefit from the increase in disposable incomes of Rohm employees."

Roxas said the grant of tax incentives was approved by the Department of Finance.

Rohm’s gross income tax incentive will be subject to PEZA’s annual review, including their compliance with investment commitments.

"The grant of the tax incentives underscores our desire to maintain an economic environment that lowers the cost of doing business and encourages the expansion, particularly of industries, strongly committed to the Philippines progress and development."

Rohm’s three subsidiaries in the Philippines are projecting a four-fold increase in their export revenues from P16.7 billion in 2000 to P58.4 billion by the year 2005.

Rohm’s expansion project at its facilities at the People’s Technology complex in Carmona, Cavite which was recently approved by the PEZA amounts to P3.1 billion.

One local subsidiary, Rohm Electronics Philippines Inc., earlier announced its intention to invest P500 million to expand its manufacturing operations in the country.

Rohm’s primary export markets are Germany, the United Kingdom, the US, Japan, Hong Kong, Malaysia, Taiwan, Singapore, Thailand and Korea.

Rohm is 80-percent owned by Rohm Apollo Electronics Co. Ltd. of Japan while 24.9 percent is owned by Singaporean Rohm Electronics Asia Pte. Ltd. with the remaining 0.1 percent owned by a group of local investors.