Scope and Definitions Regarding Taxation
- Air-conditioning units not certified as locally manufactured by the Board of Investments deemed imported
- Imported components and parts subject to additional tax, except those:
- Of common and general use
- Authorized for import under the Board of Investments’ local content or rationalization program
Basis and Rationale for Tax Differential
- Local manufacturers already registered and participating in a local content program
- Board of Investments annually reviews and determines feasible locally manufactured components
- Assemblers required to use/manufacture local components in lieu of imported
- Protection of local industry through tax differential against imported goods
Administrative Authority and Legal Basis
- Order issued by the President under constitutional powers and Section 193(c) of Presidential Decree No. 1358
Effectivity
- The Executive Order takes effect immediately upon promulgation
Legal and Procedural Impact
- Additional tax reinforces protectionist measures to promote local manufacturing
- Certification by Board of Investments used as a determinant for tax applicability
- Ensures fair treatment for local manufacturers versus importers or assemblers using imported parts