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Gov’t urged to adopt ‘export recovery’ incentives


An exporters’ group wants the government to reward companies that bounce back from the economic downturn, proposing tax perks for those that rehire laid-off workers or are able to regain lost markets. The state should likewise help struggling exporters by easing a rule setting a minimum export sales level before a firm can qualify for incentives, the Philippine Exporters Confederation, Inc. (Philexport) said in a statement. The petition came as the Board of Investments (BoI) ended on Friday the period for accepting position papers on the proposed list of business activities eligible for tax perks this year. The draft investment priority plan for 2010, which the Board of Investments (BoI) presented at a public hearing early this month, no longer carries last year’s provision that awarded incentives to troubled firms that retained or hired workers despite the downturn. "[We have] appealed for the re-inclusion of the contingency list and suggested it to be renamed ‘Export Recovery List’ of projects, reasoning that due to drastic measures — layoff of workers, shortened workweeks, suspension of operations and selling to the local market to stay afloat — the exporters had failed to take advantage of the incentives last year," the Philexport said at the weekend. The group proposed that perks be granted to firms that rehire or refill vacant positions left by laid-off workers, sell to alternative markets, and regain lost markets in the US, Japan and Europe. "Indigenous exporters" or those that use agricultural products as components are particularly interested in this incentive since their subsector employs a [number] of workers," Philexport President Sergio R. Ortiz-Luis, Jr. said in a telephone interview on Sunday. BoI officials could not be immediately reached for comment. Earlier, they said the provision on job retention had been dropped after the National Economic and Development Authority declared the worst of the crisis was over. The Philexport statement urged the BoI to suspend an export sales requirement that needs to be hurdled by firms seeking to avail themselves of tax perks. The yearly investment priority plan requires exporters applying for incentives to export at least half of their output if the enterprise is Filipino-owned or at least 70 percent if owned by a foreigner. "Exporters... could not seek incentives for their export activities as they sought to dispose to the local marketplace goods that were ordered and later canceled by foreign buyers," the Philexport said. Export sales were slashed by a fifth to $38.327 billion in 2009 from year-ago levels, official data showed. "As part of government assistance to the export recovery thrust, [we] request the BoI to suspend this... export requirement from 2010 to 2011," it said. Last year, the BoI suspended the requirement under Board Resolution 12-15 because of the downturn, allowing firms already registered with the state agency to keep enjoying their tax perks even if they fail to ship out the required volume. A final draft of the 2010 investment priority plan is expected to be submitted to President Gloria Macapagal-Arroyo this quarter.

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