WHEREAS,
the present economic situation necessitates more export earnings to
supply our foreign exchange requirements, particularly in view of the
increasing cost of petroleum imports;chanroblesvirtualawlibrary
WHEREAS, it is essential that firms which are in position to export be
so encouraged by liberalizing the provisions of R.A. 5186, R.A. 6135
and P.D. 1159;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, by virtue of the powers vested
in me by the Constitution, do hereby decree and order that:cralaw:red
Section 1. The allowable deduction of a registered
export trader under Republic Act 6135 of ten per cent (10%) of its
total export sales is hereby increased to twenty per cent (20%).
Provided, further, that a registered export trader with its own offices
abroad may additionally deduct from its taxable income an amount
equivalent to its expenses in establishing and maintaining for the
first five (5) years, such overseas offices; Provided, finally, That
the Central Bank shall provide the necessary foreign exchange required
to maintain such overseas offices of a registered export trader.
Section 2. The following additional incentives shall
be granted registered export producers under R.A. 6135, subject to such
conditions as the Board of Investments may impose:cralaw:red
(1) Amortized deduction of organizational and
pre-operating expenses as provided under Sec. 7(a) of R.A. 5186;chanroblesvirtualawlibrary
(2) Accelerated depreciation as provided under Sec.
7(b) of R.A. 5186;chanroblesvirtualawlibrary
(3) Net operating loss carry-over as provided in Sec.
7(c) of R.A. 5186; chanroblesvirtualawlibrary
(4) Exemption from the provisions of P.D. 1395 on
five per cent (5%) duty and five per cent (5%) tax on previously exempt
importation;chanroblesvirtualawlibrary
(5) Exemption from P.D. 485 with respect to the
reduction of tax exemption on imported capital equipment for
non-pioneer enterprises with total assets or projected total assets of
P500,000.00 for replacement or modernization or for expansion of
projects with over 20% return on equity;chanroblesvirtualawlibrary
(6) The tax-free importation of capital equipment by
a registered export producer is hereby extended from five (5) to seven
(7) years;chanroblesvirtualawlibrary
(7) Sales tax exemption provided for in Sec. 2 of
P.D. 1469 for articles sold by a registered export producer to another
export producer or export trader, under such guidelines to be
formulated by the Board of Investments in consultation with the Bureau
of Internal Revenue.
Section 3. For purposes of qualifying as a registered
export producer and the enjoyment of the reduce income tax incentive
under R.A. 5186, R.A. 6135 and P.D. 1159, export sales shall be deemed
to include sales to another export producer who utilizes such products
as direct inputs of its export products and sales to an export trader,
whether registered with the Board of Investments or not
Section 4. Export products for listing in the Export
Priorities Plan need not meet the limitation that not more than eighty
per cent (80%) of its value is attributable to imported raw materials,
provided, that, such product meets the local content requirement, if
any, set by the Board of Investments; provided further, that products
of existing firms with capacity for export, qualified as
non-traditional export, shall be deemed listed in the Export Priorities
Plan under such conditions as the Board of Investments may
impose. chanroblesvirtualawlibrary
Section 5. Without prejudice to minimal local sales
authorized by the Board of Investments to meet domestic shortages,
registered enterprises exporting 100% of its production need not comply
with Section 19 (a) (3) of R.A. 5186 which provides that the foreign
exporter must become a Filipino national within a certain period.
Section 6. Section 16(r) of R.A. 5186 and Section
13(3) of R.A. 6135 authorizing the Board of Investments to suspend or
cancel the registrations with the Board, if the firm's earnings excess
33-1/3% of equity, are hereby repealed. Any other laws, decrees, rules
and regulations inconsistent herewith are hereby repealed or modified
accordingly.
Section 7. This Decree shall take effect immediately.
DONE in the City of Manila,
this 9th day of October, in the year of Our Lord, nineteen hundred and
seventy-nine.
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