BOI eyes additional tax perks for local car parts makers

The Board of Investments is prepared to give additional incentives to local automotive parts manufacturers exporting their products to encourage these firms to increase their production volume and tap the bigger overseas market.

BOI managing director Gregory Domingo earlier said the incentive package could be ready by June this year and would be separate from the incentives being eyed for local automotive makers of completely-built units (CBUs).

Aside from CBU exports, the government also wants to encourage the local auto parts manufacturers to go into direct exports.

Based on initial discussions by the BOI with the local automotive industry representatives, the proposed incentive would be in the form of tax credits which the local autoparts makers could use to pay any of their outstanding tax obligation.

However, the BOI said the export incentives would only be given on the incremental export volume of local parts manufacturers over what they already exports.

The agency added the possible revenue impact of the planned perks will still have to be computed, taking into account the possible objection by the Department of Finance since the incentives correspondingly translate to reduced tax revenues for the budget deficit-laden government.

On the part of CBU exporters, meanwhile, the BOI is leaning towards the grant of a discount on excise taxes for each CBU export.