Participants and domestic autoparts manufacturers in the Comprehensive Automotive Resurgence Strategy (CARS) program expect to receive an estimated P2.6 billion in fiscal tax incentive claims.
Ferdinand Raquelsantos, president of the Philippine Parts Makers Association (PPMA), said that of the total amount P1.2 billion have been the audited claims of the 8 automotive parts makers and the balance of P1.4 billion from the two CARS assemblers — Mitsubishi Motors Philippines Corp. and Toyota Motor Philippines Corp.
“Hopefully we can get this in this quarter,” said Raquelsantos, who is also part of the audit team conducted by the Project Management Office, which manages the CARS Program.
Raquelsantos said that the amount is equivalent to 70 percent of total claims filed by the parts makers and car assemblers. “For the P1.2 billion for parts makers, its already established. The balance of P1.4 billion for Car Assemblers is already audited but not yet completely processed,” he said.
The fiscal incentives will be given in the form of Tax Payment Certificate (TPC), which can be used by the claimants for payment of their value added tax, import duty or income tax to the government.
Given the tight resources of the government during this pandemic, he expressed fears that the claims may not be processed soon enough.
Raquelsantos also explained that only 70 percent of claims have been granted because there were instances of double availments. Because the total fiscal incentives to be granted for the fiscal incentives is P9 billion per participant, there will still be future claims that may be filed by the parts participants and assemblers.
To fully avail of the tax incentives, CARS participants/assemblers must increase their local content. According to Raquelsantos, the two CARS participants have only 40 percent local content so far. The target is to achieve at least 60 percent parts localization in the production of the two car models Mirage and Vios, enrolled by their respective assemblers Mitsubishi Motors Philippines and Toyota Motors Philippines.
“They (Mitsubishi and Toyota) still have time to increase their local content,” he said.
The six-year tax incentive CARS Program of the government requires the participants to produce 200,000 units each of their enrolled car models.
With the pandemic, the Board of Investments (BOI), which oversees the program, has allowed to extend the program timeframe. The CARS program is already on its fourth year of implementation.