DTI may seek legislation on tax perks for Clark locators

The Department of Trade and Industry (DTI) may seek legislation to remedy the current problem of Clark economic zone locators following the decision of the Supreme Court (SC) nullifying their tax and duty-free privileges.

This was disclosed yesterday by Trade and Industry Secretary Peter B. Favila even as government filed a motion for reconsideration with the SC.

With the filing of a motion for reconsideration, the SC must first resolve the Clark tax issue with finality before the SC decision becomes final and executory.

Thus, the status quo is likely to be maintained in Clark while the issue remains pending with the SC.

According to Favila, there is a need for a clarificatory resolution from Congress regarding the tax treatment of ecozone locators.

Favila appealed to skittish foreign investors in Clark to "relax" as government hastens to address their concern.

The DTI and the Department of Finance (DOF), Favila said, have agreed to work to immediately allay the anxieties and apprehensions of the foreign investors.

Earlier, Favila attended the National Export Congress held at the Dusit Hotel where President Arroyo, who was the guest speaker, instructed him to address the concerns of the export sector.

Among the primary concerns of the export sector are additional financing for the sector as well as for export promotion.

One proposed financing program is a Micro, Small and Medium Enterprises (MSME) Surety Fund which would be funded primarily by the Development Bank of the Philippines (DBP).

Exporters also appealed for the removal of red-tape in the processing of export and import documents and the granting of necessary clearances including environmental clearances.

Exporters estimate that they need at least P10 billion in trading credits to increase their production and shipment of goods for export.

Additionally, exporters stressed the need for more export promotion.

The DTI has allotted a annual budget of P500 million in the past five years for export promotion.

According to exporters, the DTI should provide an additional P1 billion to the current P500 million annual export promotion budget to approximate the efforts of neighboring countries in pushing their export products.