Ecozone locators push for new tariff formula

Locators in the country’s special economic zones are pushing for a change in the basis of tariff computation on goods they are selling domestically from CEPT (Common Effective Preferential Tariff) rates on finished products to CEPT rates on raw materials.

Ecozone locators argued that the Bureau of Customs (BoC) computes the taxes on goods sold domestically based on CEPT rates for finished products.

Thus, the applicable rate would be between zero to five percent.

However, if the CEPT rates on raw materials is used, the applicable rate would be zero to one percent.

Lower duties would mean lower domestic prices.

Normally ecozone locators export up to 70 percent of their production with only about 30 percent or less sold domestically.

Goods sold domestically would still be subject to applicable tariff rates, which in the past has been based on Most Favored Nation (MFN) rates.

However, Malacañang in May last year, had issued Executive Order No. 214 which mandated that products manufactured in ecozones with at least 40 percent of its product content originating from any ASEAN members states and sold in the Philippine customs territory would be subject to the applicable CEPT rates as provided for in the agreement on the CEPT scheme for the ASEAN Free Trade Area.

Ecozone locators are, this, pushing for an amendment of the implementing rules and regulations (IRR) on the applicable CEPT rates.