RULES AND REGULATIONSTO IMPLEMENT THE
EXPORT
DEVELOPMENT ACT OF 1994[Republic
Act
No. 7844][AN ACT TO
DEVELOP
EXPORTS AS A KEY TOWARDS THE ACHIEVEMENTOF THE
NATIONAL
GOALS TOWARDS THE YEARS 2000]PART IGENERAL
PROVISIONS
Pursuant
to the provisions of Republic
Act No. 7844, otherwise known as the "Export
Development
Act of 1994", the following rules and regulations are hereby
adopted:
RULE I.
Declaration of policy. -
Section
1. It is declared
the policy of the State to evolve export development into a national
effort.
The Government shall champion exports as a focal strategy for a
sustainable;
agri-industrial development to achieve Philippine NIChood towards the
Philippines
2000. The private sector shall take the lead in the collective effort
to
promote exports through discipline and hard work, as it confronts the
challenge
of winning international markets.
Section
2. The Government and the
private sector shall jointly transform the Philippines into an
exporting
nation. The State shall instill in the Filipino people that exporting
is
not just a sectoral concern but the key to national survival and the
means
through which the economics goals of increased employment and enhanced
incomes can most expeditiously be achieved.
RULE II.
Basic principles, policies and objectives.
-
Sec. 1.
It is the goal and
objective of the Export Development Act, hereinafter referred to as the
Act, to provide a macroeconomic policy framework that supports export
development,
especially in the following key areas of concern:
[a] Monetary and foreign exchange
policies shall establish and maintain a competitive exchange rate,
supported
by measures to provide safely nets for various sectors that may be
adversely
affected by implementation of such policies. Such policies shall be
consistent
with the responsibility and primary objective of the Bangko Sentral ng
Pilipinas pursuant to Section 3 of Republic Act No. 7653;
[b] Fiscal and credit policies
shall
provide adequate funds for public and private investments and business
expansion for export purposes, while keeping the cost of credit
comparable
to international level and ensuring access to loanable funds for SMEs
as
well as highly technical export enterprises, especially those in the
countryside;
[c] Agriculture policies build up
viability
and competitiveness of the country's agriculture sectors and facilitate
their linkage with industry to strengthen the agri-industrial base of
the
country's export thrust;
[d] Trade, tariff and customs
policies
shall engender competitiveness of domestic industries and facilitate
their
participation in international trade;
[e] Technical support policies
to
improve the quality of export products shall be adopted, particularly
those
relating to technology transfer, R & D, technical training and
related
activities. As such, the Department of Science and Technology (DOST)
and
the Department of Agriculture (DA) shall be supported by state colleges
and universities in the diffusion of technology, information and
training
to the countryside for agri-industrial and export development;
[f] Urgent attention shall be
given
to policies affecting infrastructure in order to ensure the adequate
supply
and quality of power, water (e.g., for irrigation),
transportation
(e.g., air, shipping and cargo handling); communication, and
environmental,
sanitary and pytho-sanitary, health and security measures to support
the
flow of sufficient and suitable goods and services in the context of
the
national export drive;
[g] The link between export
growth
and countryside development must be strengthened through policies
favorable
to SMEs, regional industrial centers, and export processing zones to
boost
rural and farm-based entrepreneurship in identified geographic economic
growth areas of the country;
[h] Labor and industrial
relation
policies must recognize the inevitable industrial shifts that will
occur
in the effort to achieve international competitiveness, focus shall be
given to the formulation of accords between labor and management which
shall provide for sustained increase in productivity and
competitiveness.
In line with this, dual training schemes shall be integrated as a basic
component to the country's primary and secondary education program to
ensure
that the manpower needs of agriculture and industry will be matched by
the skills generated by the educational system. Reasonable price and
income
policies shall likewise be adopted in order to safeguard the interest
of
labor sector;
[i] All government agencies
whose
actions affect exports, such as the Board of Investments (BOI), Bureau
of Customs (BOC) and the Bureau of Internal Revenue (BIR) shall
simplify
procedures to minimize bureaucratic red tape; and
[j] Provisions of existing laws
deemed
detrimental to the export sector shall be repealed in subsequent acts.
RULE III.
Definition of terms. -
Sec. 1.
For purposes of these rules,
the terms used herein shall be construed to have the following meanings:
[a] "Exporter" shall mean
any person, natural or juridical, licensed to do business in the
Philippines,
engaged directly or indirectly in the production, manufacture or trade
of products or services which earns at least fifty per cent (50%) of
its
normal operating revenues from the sale of its products or services
abroad
for foreign currency. In the case of indirect exporters, the
requirement
that products or services be sold "abroad for foreign currency" shall
not apply as, by the very nature of their business, the sale of their
products
or services takes place in the Philippines, and such indirect exporters
are usually paid in Philippine currency;
[b] "Services" shall
refer
to the supply of service for export, in the following areas only:
information
technology services, construction services, consultancy and
professional
services and other services, as defined jointly by the Department of
Finance
(DOF) and the Department of Trade and Industry (DTI). Services
rendered
by overseas contract workers are not covered in this definition. As
provided
in the immediately preceding section, these need not be rendered abroad
as, by the nature of some services, the sale of the same takes place in
the Philippines;
[c] "Export promotion"
shall
refer to a range of export activities which the public and the private
sectors undertake. These activities include, but shall not be limited
to,
networking, especially in export support services and trade/market
information
provision; organization of trade fairs and missions; advisory services;
conduct of export-related seminars, lectures, workshops, conferences
and
trainings; publication of export-related documents; handling of quality
standards, product design and related activities aimed at promoting
existing
exports to improve the position of Philippine products in specific
foreign
markets, and other activities necessary to implement the Philippine
Export
Development Plan (PEDP);
[d] "Export incentives" shall
refer to the support measures provided by the government to exporters
to
encourage investment in the export sector, create a freer trade
environment
and motivate exporters to increase export sales as well as perform
competitively
in the export market. These export incentives include the incentives
provided
for in the Act and the incentives being granted by the Board of
Investments
(BOI) and Local Government Units (LGUs);
[e] "Accredited
organization"
shall refer to the organization of exporters granted
accreditation
by the Export Development Council (EDC). Such accreditation shall be
granted
only to the dominant one among the existing export organizations taking
into consideration some of the following guidelines: it should be
non-stock
and non-profit; must champion, as its primary objective, the interests
of the private sector exporters, have multi-sectoral coverage, regional
representations, the biggest number of active membership of direct,
indirect
and service exporters, a track record of conducting promotional
activities
for exporters, and such other requisites as may be required by the
Council
to ensure that the organization is representative of the exporters'
sector;
[f] "Export sale or export
revenue"
shall mean the Philippine port F. O. B. value, determined from
invoices,
bills of lading, inward letters of credit, lading certificates and
other
commercial documents, of export products, exported directly or
indirectly
by an exporter producer or the net selling price of export products
sold
by an exporter producer to another exporter producer, or to an exporter
trader that subsequently exports the same: Provided, That such
sales
of export products to another producer or to an export trader shall
only
be deemed export sales when actually exported as certified by the
latter:
Provided, Further, That without actual exportation, the
following
shall be considered constructively exported for purposes of this
provision:
(1) sales to export-oriented manufacturers through the bonded
manufacturing
warehouses or common bonded warehouse; (2) sales to export processing
zones;
(3) sales to export traders operating bonded warehouses supplying raw
materials
used in the manufacture of export products under the guidelines already
set by the Board of Investments (BOI), the Bureau of Customs (BOC) and
the Bureau of Internal Revenue (BIR); (4) sales to foreign military
bases,
diplomatic missions, duty-free shops, and other agencies and/or
instrumentalities
granted tax immunities, of locally-manufactured, assembled or repacked
products, whether paid for foreign currencies or not: Provided,
Further,
That export sales of registered export traders may include
commission
income: and Provided, Finally, That exportation of goods on
consignment
shall not be deemed export sales until the export products consigned
are,
in fact, sold by the consignee; sales of locally manufactured or
assembled
goods for household and personal use of Filipinos abroad and other
non-residents
of the Philippines as well as returning Overseas Filipinos under the
Internal
Export Program of the government and paid for in convertible foreign
currency
inwardly remitted through the Philippine banking systems shall also be
considered export sales;
[g] "Small and Medium-Scale
Enterprises
[SMEs]" for purposes of this Act, shall mean those enterprises in
export
activities with assets up to Sixty Million Pesos (P60,000,000.00) which
is relevant to a minimum size competitive economic activity vis-a-vis
the East Asian Region;
[h] "Eximbank" shall
refer
to the institution which will be established to deal primarily or
exclusively
with export financing, guarantee and insurance as well as other
financing
services that will support the operation of exporters of manufactured
products
and services and indirect exporters, particularly the SMEs; and
[i] "Negotiability"
shall
mean that tax credits granted are negotiable in accordance with Rule
VII,
Sec. 4 of these Rules.
PART IITHE
PHILIPPINE
EXPORT DEVELOPMENT PLAN [PEDP]
RULE IV.
Formulation and approval. -
Sec.
1. The President of the
Republic of the Philippines shall approve a rolling three-year
Philippine
Export Development Plan (PEDP) prepared by the Department of Trade and
Industry (DTI) which shall form part of the Medium-Term Philippine
Development
Plan (MTPDP). It shall be formulated in consultation with the private
sector,
validated and updated semestrally.
Sec.
2. The PEDP shall define
the country's annual and medium-term export thrusts, strategies,
programs
and projects and shall be jointly implemented by the government,
exporters
and other concerned sectors.
PART IIIINSTITUTIONAL
STRUCTURES
RULE V.
The Export Development Council [EDC].
-
Sec. 1.
Structure.
- The existing Export Development Council, hereinafter referred to as
the
Council, which was created by Executive Order No. 110 (1993), and
Executive
Order No. 180 (1994), shall be strengthened and institutionalized for
the
purpose of overseeing the implementation of the PEDP and coordinating
the
formulation and implementation of policy reforms to support the said
Plan.
Sec. 2.Power
and functions. - The Council shall have the following powers and
functions:
[a] Approve the PEDP for its
submission
to and approval by the President and its integration into the
Medium-Term
Philippine Development Plan (MTPDP); coordinate, monitor and assess the
implementation thereof, and when necessary, institute appropriate
adjustment
thereon in the light of changing conditions in both the domestic and
international
environment;
[b] Periodically review and
assess
the country's export performance, problems and prospects;
[c] Identify the main
bottlenecks,
problem areas and constraints in all areas, sectors and activities
which
influence the development of exports, including, but not limited to,
such
matters as policy framework, physical infrastructure, foreign exchange,
financing, technology, production, promotion and marketing;
[d] Mandate specific
departments
or agencies to attend to the bottlenecks and problems constraining the
development of exports in any of the areas mentioned in paragraph (c)
above,
and require the concerned Secretaries to deliver a progress report(s)
on
the actions or initiatives taken to resolve these areas of concern at
the
next meeting(s);
[e] Ensure export quality
control
by overseeing the formulation and implementation of quality control
guidelines
by appropriate agencies to make Philippine exports at par with
world-class
products;
[f] Impose sanctions on any
government
agency or officer or employee thereof, or private sector entity that
impedes
efficiency of Philippine goods;
[g] Recommend to Congress any
proposed
legislation that would contribute to development of export;
[h] Submit quarterly reports to
the
heads of both the House of Representatives and the Senate;
[i] Formulate policies or
recommend
measures and draw up a study within ninety (90) days from the approval
of the Act, relative to the rationalization of the government's export
promotion and development functions/activities and programs for the
eventual
transfer of government export promotions and
development activities to the private
sector within the period of two (2) years after the approval of the Act;
[j] Formulate the policies for
the
granting of incentives of exporters;
[k] Adopt such policies, rules,
procedures
and administrative systems for the efficient and effective exercise of
these powers and functions, including the creation or adoption of an
executive
committee or the secretariat;
[l] Grant and review the
accreditation
to the organization of exporters: Provided, That the
organization
accredited shall meet the following requisites: it must be non-stock
and
non-profit, must champion the interests of the export sector as its
primary
objective, have multi-sectoral coverage, regional representation, the
biggest
number of membership of direct and indirect exporters, a track record
of
conducting promotional activities for exporters, and such other
requisites
as may be required by the Council to ensure that the organization is
representative
of the exporters' sector;
[m] Issue standards and
policies
to be observed by local government units (LGUs) in order to:
Sec.
3.Composition.- The Council shall be composed of the following:
[a] Secretary of the Department
of Trade and Industry as Chairman;
[b] Director-General of the
National
Economic Development Authority;
[c] Secretary of the Department
of Finance;
[d] Governor of the Bangko Sentral
ng Pilipinas;
[e] Secretary of the Department
of Science and Technology;
[f] Secretary of the
Department
of Agriculture ;
[g] Secretary of the Department
of Foreign Affairs;
[h] Secretary of the Department
of Labor and Employment, and
[i] Nine (9)
representatives
from the private sector, the majority of whom shall be recommendees of
the accredited organization and one of whom shall be appointed as
Vice-Chairman.
Other
heads of executive agencies, private
organizations or individuals can be called upon by the Council to
resolve
issues and problems that concern their respective offices.
Likewise,
such heads of agencies, private
organizations or individuals shall respond to the queries of the
Council
within two (2) weeks from the time such queries are received.
The
President shall appoint the private
sector representatives, who are not ex-officio members, upon
nomination
of the accredited organization, ensuring balanced representation from
the
Visayas and Mindanao and various sectors, such as the labor sector,
agriculture
and traditional export sectors and the like. The private sector
representatives
of the Council shall serve for a period of two (2) years. When a
vacancy
arises due to the resignation, death or incapacity of a member, a
replacement
who shall serve for the remainder of the member's term of office shall
be appointed by the President.
Sec. 4.
Executive
Committee and the Secretariat. - There shall also be constituted
an Executive Committee and a Secretariat to assist the Council.
The
Executive Committee (ExCom) shall have
the following powers and functions:
[a] Prepare initiatives for the
Council's consideration;
[b] Assist the Council in
coordinating
and monitoring the implementation of the PEDP;
[c] Act as clearing house for all
submissions to the Council;
[d] Summarize options on issues
for discussion by the Council;
[e] Recommend the Council's
agenda;
and
[f] Review the budget, work
plans and reports to be submitted to the Council
The
ExCom shall be composed of the following:
[a] the Secretary/Undersecretary
of Trade and Industry as Chairman;
[b] the Secretary/Undersecretary
of Finance;
[c] the Governor/Deputy Governor
of the Bangko Sentral ng Pilipinas;
[d] the Director-General/Deputy
Director-General of the NEDA;
[e] a representative of the Office
of the President; and
[f] five (5) private sector
representatives.
The
Secretariat, as constituted under the
old Export Development Council, shall serve as the support staff of the
Council and the ExCom in the exercise of their functions.
Sec. 5.Meetings.
- The Council shall meet once a month: Provided, That the
President
or the Chairman may convene the Council anytime whenever he deems it
necessary.
The President shall preside over meetings of the Council on a quarterly
basis.
Sec. 6.Funding.
- The activities and operational expenses of the Council shall be
funded
jointly by budgetary appropriations from the government and by private
sector contributions as provided for in Executive Order No. 98.
RULE VI.
Accredited export organization. -
Sec. 1.Accreditation.
- The Council shall accredit a single umbrella organization of
exporters
pursuant to Rule V, Sec.2(1) of these rules to represent the private
sector
concerns and interests for three (3) years, after which the Council
shall
undertake the review of the accreditation prior to the granting or
re-granting
of the said accreditation.
Sec. 2.Functions.
- The accredited organization shall:
[a] Recommend private sector
representatives
to the Council, with consideration of balanced sectoral representation
as provided in Sec. 9 of the Act;
[b] Represent the interests of
the
export sector;
[c] Be responsible for
coordinating,
supporting and assisting the DTI relative to the formulation and
implementation
of the government's export promotion programs and policies: Provided,
That in the event that some of the export promotion functions of the
government
are privatized in accordance with the Act, it shall be responsible for
the performance of such privatized export promotion functions;
[d] Manage the Philippine Trade
Centers, which shall include, among others, the authority to enter into
contracts with specific organizations or firms for the operation of
certain
promotion functions or facilities; and
[e] Respect the obligation of
the
previous dominant exporters' organization.
PART IVEXPORT
INCENTIVES
RULE VII.
Availment of incentives. -
Sec. 1.Registration
requirements. - The incentives under Article 3 of the Act shall
only be granted upon fulfillment of the following requirements:
[a] an annual accreditation
from the Bureau of Export Trade Promotion (BETP) of the Department of
Trade
and Industry or the appropriate deputized agency that the exporter
satisfies
the requisites provided for in Rule III, Sec. I(a) of these Rules;
[b] the submission of a sworn
statement
that the exporter complies with the requirements of the Minimum Wage
and
SSS laws; and
[c] payment of the
corresponding
fees, thereby satisfying the requirements for accreditation.
For this purpose, BETP shall deputize
the
following appropriate agencies and monitor the effective issuance of
the
said certification:
[i] the Philippine
Economic Zone Authority (PEZA), for companies registered within its
zones;
[ii] the Board of
Investments
(BOI), for companies registered with it;
[iii] the Garments and
Textile Export
Board (GTEB), for companies accredited with it;
[iv] the Subic Bay
Metropolitan Authority
(SBMA) and the Clark Development Corporation (CDC), for companies
situated
within their areas;
[v] the Philippine Exporters
Confederation,
Inc. (Philexport) and/or the Philippine Chamber of Commerce and
Industry
(PCCI), for member-companies situated outside the areas;
[vi] BETP, for companies
whose manufacturing
or service operations do not fall under the supervisory or regulatory
functions
of the above-enumerated offices or authorities; and
[vii] such other offices or
authorities
with the same or similar function as the aforementioned: Provided,
That they are so mandated by law: Provided, Further, That if
there
are two (2) or more offices or authorities exercising supervisory or
regulatory
functions over an exporter's manufacturing or service operation, any
one
(1) of such offices or authorities may issue the aforesaid
certification.
In case of importations, the exporter
must
submit a sworn statement that the items to be imported shall be used
primarily
for the production of export goods.
Sec.
2. Incentives.
- Exporter registered under the Export Development Act shall be granted
the following incentives:
[a] Exemption from PD 1853, or
the Advance Payment Of Customs Duties. - To be exempt from the
provisions
of PD 1853, an eligible exporter shall present the certification
provided
for in Sec. 1(a).
The said certification shall be
presented
to the authorized agent bank (AAB) at the time of the opening of the
letter
of credit, and verified copies shall be distributed as follows:
[i] First or original
copy,
to the port where the articles are to be entered;
[ii] Second copy, to be
retained
by the ABB;
[iii] Third copy, to be filed
with
the entry documents; and
[iv] Fourth copy, to be retained
by the Importer.
In cases where a letter of credit is not
opened,
the certification should be presented to the Office of the Collector of
Customs at the port where the articles are to be entered.
[b] Duty-Free Importation
of Machinery
and Equipment and Accompanying Spare Parts until December 31, 1997. -
To qualify for the duty-free importation of machinery and equipment,
including
replacements and accompanying spare parts, which are primarily used in
the manufacture of exported products, the importation should be
covered,
where applicable, by a Clean Report of Findings (CRF) issued by the
Societe
Generale de Surveillance (SGS): Provided, that importations of
used
machinery and equipment shall, in addition to the CRF, be covered by a
Certificate of Approval from the Council or any of its deputized
agencies:
Provided, Further, That importations exempted from the SGS
requirement
prior to the approval of the Act shall continue to enjoy said
exemption.
The same certifications required in Sec. I (a) and (d) shall apply to
the
importations of machinery, equipment and accompanying spare parts.
Rules on tax credit granted under the
existing
Value-Added Tax (VAT) laws shall apply for importations of machinery
and
equipment and accompanying spare parts but adopting the definition of
"exporter"
as provided for in Art. 1. Sec. 4(a) of the Act.
[c] Tax Credit for Imported
Inputs
and Raw Materials Primarily Used for the Production and Packaging of
Export
Goods Which are Not Readily Available Locally until December 31, 1999.
- Importations of raw materials and inputs and semi-manufactured
products
utilized and/or forming part in the manufacture, processing, production
or packaging of products to be exported directly or indirectly shall be
allowed unless said raw materials or inputs are otherwise listed by the
Council as locally available in sufficient quantity and price.
The tax credit granted under this
section
shall be equivalent to taxes and duties paid on inputs and raw
materials
primarily used and/or forming part of the production and packaging of
export
goods and the supply of services which are readily available locally.
Operators
of bonded manufacturing warehouses, users of common bonded warehouses,
and other special economic zones shall continue to be exempt from the
payment
of the taxes and duties provided herein.
[d] Tax Credit for Increase
in
Current Year's Export Revenues.
The tax credit for increase in
current
year's export revenue shall be computed as follows:
The first 5% increase in annual
export
revenue over the previous year would mean a credit of 2.5% to be
applied
on the incremental export revenue converted into pesos at the current
rate;
The next 5% increased would be
entitled
to a credit of 5%;
The next 5% increased would be
entitled
to a credit of 7.5%;
In excess of 15% would be entitled to
a
credit of 10%
Such tax credit is only granted for
the
year when the performance is achieved. Exporter revenues used in the
calculation
of such tax credits shall be subject to verification as prescribed
under
the rules and regulations that shall be jointly prepared by the
Secretary
of Finance and the Secretary of the Department of Trade and Industry,
subsequent
to these rules, to specify the particulars of the incentive.
[e] Tax Credit for Use or
Import-Substitution
of Non-Traditional Products. - For exporters of non-traditional
products
who use or substitute locally produced raw materials, capital equipment
and/or spare parts, tax credit equivalent to twenty-five per cent (25%)
of the duties that would have been paid had these inputs been imported
shall be granted: Provided, That this incentive would be
available
until December 31,1997 and can be extended for another three (3) years
by the President upon the joint recommendation of the Secretary of
Finance
and the Secretary of Trade and Industry.
The Secretary of Finance, Secretary
of
Trade and Industry and the Council shall jointly prepare a set of
criteria
to be used classifying export products into traditional and
non-traditional.
Thereafter, on the basis of said criteria, products identified as
traditional
export products shall not be qualified for the tax credit under this
section.
To be
eligible for the tax credit, an exporter
of non-traditional product must have used locally-produced raw
materials,
capital equipment and/or spare parts, or has substituted
locally-produced
raw materials, capital equipment and/or spare parts for similar
articles
previously imported.
Exporters
may also enjoy the incentives
under Executive Order No. 226, otherwise known as the Omnibus
Investments
Code, as amended, and other laws: Provided, That they are
registered
according to the rules and regulations of the office or authority
concerned:
Provided, Further, That in case of parallel incentives granted
by
the office or authority and the Act to exporters, a subsequent
registration
under the Act shall not entitle the exporter to the enjoyment of the
same
incentives provided herein. Any declaration to the contrary shall be
dealt
with in accordance with the provisions of Rule XV, without prejudice to
the exporter's further criminal liability.
Sec. 3.Claims
for tax credits. - All claims for tax credits, except for
increases
in export revenues which shall be filed with the appropriate office of
the Bureau of Internal Revenue (BIR), shall be filed with the One-Stop
Shop Inter-Agency Tax Credit and Duty Drawback Center, hereinafter
referred
to as the Center, pursuant to Administrative Order 226, as amended by
AO
138. Tax credit claims shall be processed in accordance with the
Center's
existing rules and regulations.
The Center
shall issue to the eligible
exporter a corresponding Tax Credit Certificate (TCC), as evidence of
the
tax credit given to the claimant, containing the amount of tax credit
granted
as well as legal basis for the grant to be signed by the Center's
Executive
Director, as authorized by the Secretary of Finance. The TCC can only
be
utilized after securing a Tax Debit Memo (TDM) which is officially
issued
by the Center. Without such TDM, no TCC can be utilized nor honored as
payment for duties and taxes to the national government.
The TCC
issued can be utilized for payment
of taxes and duties to the national government, except withholding
taxes.
[a] Imported Inputs, Raw
Materials
and Capital Equipment. - Tax credit applications herein shall
be filed not later than ninety (90) working days from the date of
exportation
of the qualified exporter. The corresponding TCC shall then be issued
by
the Center not later than thirty (30) working days from the date the
complete
application has been accepted.
Taxes and duties which have been paid
for imported inputs and raw materials cannot be claimed as a tax credit
under this section if they have been previously claimed as a credit for
purposes of the Value-Added Tax (VAT).
The BIR shall develop a mechanism to
verify
the consistency and accuracy between the amount of tax credit for the
grant
of incentives provided herein and the amount of tax credit claimed for
proposes of computing the VAT.
[b] Increase in Current
Year's
Export Revenues. - The application for the incentives due to
increases
in export revenue shall be filed with the appropriate BIR office not
later
than sixty (60) days from the date of filing of the income tax return.
The application shall be subject to verification and the corresponding
TCC shall be issued not later than thirty (30) working days from the
date
the complete application has been filed.
The incentives for increase in export
revenues
shall be availed of by the qualified exporter upon filling of an
Application
for Tax Credit, and attaching to the said application the following:
[i] an external auditor's
certification
that the increase in current year's export revenues of the qualified
exporter
is reported as part of his gross income which was declared for income
tax
purposes; and
[ii] a certified schedule of
actual
export sales indicating therein relevant information such as the name
and
address of the customer, date of actual exportation, sales invoice
number,
dollar value, dollar conversion rate, peso equivalent, etc. for the
current
and immediately preceding years.
The incentives can be granted even if
the
direct exporter reported a net taxable loss in his income tax return
during
the current year: Provided, however, that proceeds from the
sale
of a TCC issued for the increase in export revenues shall be reported.
[c] Import-Substitution.
-
Tax credit applications herein shall be filed not later than ninety
(90)
working days from the date of exportation of the qualified exporter.
The
corresponding TCC shall then be issued by the Center not later than
thirty
(30) working days from the date the complete application has been
accepted.
Sec.
4.Negotiability.
- The TCC for Sec. 3(a) shall be valid for five (5) years from
the
date of the issuance thereof. The TCC for Sec. 3(b) and (c) shall be
valid
for three (3) years from the date of the issuance thereof. Any TCC
which
is not utilized within the prescribed period shall be considered
invalid
and shall be subsequently canceled. However, the negotiability or
transferability thereof shall be limited to a maximum of three (3)
transfers
during its lifetime. The TCCs issued for the purpose shall be
negotiable
instruments and may be transferred to any person, natural or juridical,
except to local government units. Within a period of (30) days from the
date of transfer of the TCC, the holder thereof shall notify the Center
of the transfer of the TCC for purposes of recording and monitoring.
PART VSUPPORT
AND
PROMOTIONAL ACTIVITIES
RULE VIII.
Export financing, guarantee and insurance.
-
Sec. 1.Export
financing institution. - Pursuant to Section 7(I) of the Act,
the
Council shall make the necessary legal and feasibility
study/recommendation
on the alignment and rationalization of government programs relative to
export financing and existing organizations dealing primarily or
exclusive
with export financing, guarantee and insurance, likewise considering
the
creation of a private sector-led export financing institution whose
services
shall be primarily devoted towards supporting the operations of
exporters
and indirect exporters, particularly the SMEs.
The study
shall include the powers, functions
and operations of the proposed institution, and government equity
contributions
to the said institutions and, if and when necessary, the preparation of
a bill creating the same which the Council will recommend to Congress
within
six (6) months after the effectivity of the Act.
Sec. 2.Interim
Export Financing Program. - In the interim, while the Eximbank
is
not yet established, the Council, through the Networking Committee on
Financing
Costs, and government financial institutions (GFIs) such as the Bureau
of Small and Medium Business Development (BSMBD), the Guarantee Fund
for
Small and Medium Enterprises (GFSME), the Philippine Export and Foreign
Guarantee Corporation (Philguarantee), the Small Business Guarantee
Finance
Corporation (SBGFC), the Development Bank of the Philippines (DBP), the
Land Bank of the Philippines (LBP), and the Philippine National Bank
(PNB),
shall formulate within one year short-term, medium-term and long-term
credit
program for exporters. Further, the Committee shall provide
standardized
terms and conditions for the greater accessibility of credit through
simplified
procedures and technical assistance at globally competitive rates.
The Heads
of DBP, LBP and PNB shall report
the progress of the above programs during the quarterly meetings of the
Council with the President.
The GFIs
involved in guarantee facilities
such as BSMBD, GFSME, Philguarantee, and SBGFC shall activate their
facilities
based on the viability and the quality of loan applications from both
local
and foreign banks.
The
government counterpart funds shall
come from direct budgetary appropriations from consolidated capital
funds
of the government institution involved in export financing and
guarantees,
as mentioned above, or from equity contributions of government finance
institutions.
RULE IX.
The Export Promotion Privatization Program.
-
Sec. 1.
The Council, through the
DTI, shall commence a privatization program that shall embody the
rationalization
of the government's export promotion and development
functions/activities
and programs for the eventual transfer of the same to the private
sector
within two (2) years from the approval of the Act.
Sec. 2.
The EDC shall create a Task
Force that will draw up a study on the aforementioned, the same to be
concluded
within ninety (90) days from the approval of the Act.
Sec. 3.
The Task Force shall likewise
identify the appropriate funding mechanism for the said program. While
the appropriate funding mechanism is not yet in place, financial and
technical
assistance to the accredited organization on a project-to-project basis
shall be granted. In this regard, the national government shall
appropriate
such sums as may be necessary to the Council to be exclusively
earmarked
for export promotion and information until such time that the Council
establishes
the funding mechanism. The Council shall formulate the criteria to
avail
of this financial and technical assistance and the extent to which the
assistance shall be granted with the primary consideration of
encouraging
the information of a nationwide marketing cooperative for export
promotion.
Sec. 4.
The accredited export organization
shall be responsible for the performance of such privatized export
promotion
functions.
RULE X.
The Philippine Trade Centers [DBM].
-
Sec. 1.
The government shall hereby
assist the private sector in the establishment of Philippine Trade
Centers
which shall house the trade promotion offices and shall serve as the
permanent
exhibit sites of the country's export products. In this regard, the
government
shall provide the land for the centers, through a land grant or
long-term
lease to the accredited organization or its successor-in-interest, and
shall arrange the financing for the construction of the trade
complexes.
The accredited export organization shall manage the centers and shall
be
authorized to enter into contracts with other firms for the centers'
operation.
PART VITRANSITORY
PROVISIONS
RULE XI.
Appointment of private sector representatives.
-
Sec. 1.
Upon the effectivity of
the Act., the President of the Republic of the Philippines shall
appoint
the nine (9) private sector representatives to the Council who shall
serve
for a term of two (2) years. Thereafter, the determination of the
private
sector representatives shall be governed by Section 9 of the Act.
RULE XII.
Transitional operations. -
Sec. 1.
The Council shall immediately
function one (1) month after the approval of the Act. In the
interim,
the old Council, as constituted, shall continue to exercise the
functions
and powers provided in the Act.
RULE XIII.
Funding. -
Sec. 1.
Upon the effectivity of
the Act, the budget granted to the old Export Development Council shall
be transferred to the new Council created in the Act. Thereafter, such
sums as may be necessary for its operation and maintenance shall be
included
in the annual General Appropriations Act.
PART
VIIVIOLATIONS
OF THE PROVISIONS OF THE ACTAND/OR
ITS
RULES AND REGULATIONS
RULE XIV.
Criminal offenses and penalties. -
Sec.
1. Any person, entity,
government instrumentality or institution found to be willfully
violating
or grossly negligent in executing the mandates of the Act shall result
in the expulsion from office of its chief executive and operating
officers,
as well as the responsible officers thereof. Notwithstanding any
provision of law to the contrary, they shall likewise be prohibited
from
holding any government position for at least two (2) years.
RULE XV.
Suspension and cancellation. -
Sec. 1.
The Council may cancel an
exporter's registration for any of the following grounds:
[a] Failure to maintain the
qualifications
for registration as required by the Act;
[b] Violating of any provision of
the Act;
[c] Violating of any of these
Rules
and Regulations or any of the general and specific terms and conditions
of registration; or
[d] Violating of any law for the
protection of labor, the consuming public, sanitary and phyto-sanitary
processes, and/or the environment.
Sec.
2. For the same grounds enumerated
in the immediately preceding section, the Council may suspend the
enjoyment
of one or more incentives enjoyed by an exporter defending upon the
gravity
of the offense committed.
PART IXFINAL
PROVISIONS
RULE XVI.
Repealing clause. -
Sec. 1.
All laws, decrees,
executive orders, administrative orders, rules and regulations or parts
thereof which are inconsistent with the provisions of the Act are
hereby
repealed, amended or modified accordingly.
RULE XVII.
Effectivity. -
Sec. 1.
These implementing rules
and regulations shall have retroactive effect to 30 December 1994, the
date when Republic Act No. 7844 took effect.
Done in
Manila, Republic of the Philippines,
this 21st day of April 1995.
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