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Hybrid Car Parts To Be Imported Duty Free January 2005Malacaņang, Phillipines has issued an executive order allowing the duty-free importation of automotive parts and components to encourage local assemblers to venture into the production of hybrid vehicles and passenger cars powered by small engines as part of the governments energy and fuel conservation program.Trade Undersecretary Elmer Hernandez said President Arroyo has issued EO 397 reducing the rates of import duty on completely knocked down (CKD) parts and components for the assembly of low engine displacement and hybrid vehicles to zero from the existing rate of at least 3 percent. Hernandez, who is also managing head of the Board of Investments (BOI), said the EO was issued to encourage local assemblers to venture into the assembly of hybrid or partly electric vehicles that are deemed more powerful and more fuel efficient. This is to encourage investment in the assembly of hybrid and low engine displacement vehicles by giving them more preferential tariff of zero on their parts and components imports, he stressed. Owing to the rising cost of fuel in the world market, the Arroyo administration has embarked on a program to promote the judicious conservation and efficient utilization of resources through the most cost-effective options toward the wiser and efficient use of energy. In fact, the government has institutionalized the Committee on Fuel Conservation and Efficiency in Road Transport tasked to reduce by 5 percent the fuel consumption of road users. The transport sector is one of the highest fuel-consuming sector next to the industrial manufacturing sector. Two years ago, the BOI removed CKD tariff line for participants of the Motor Vehicle Development Program (MVDP), since it was not consistent with the World Trade Organization (WTO) with the lifting of the net foreign-exchange earning requirement and local content rule. Instead the BOI introduced tariff lines for individual parts and components. Now the government is reviving the CKD tariffs as the EO covers parts and components of motor vehicles for the transport of 10 or more passengers under the Tariff Heading 87.02; passenger cars and other motor vehicles principally designed for the transport of persons under 87.03; and motor vehicles for the transport of goods under 87.04. The EO would be in effect for one year. The BOI chief said the auto parts and components covered by the order could be imported tax free instead of the three percent Most Favored Nation (MFN) rate and the ASEAN-Common Effective Preferential Tariff (CEPT) ranging from zero to five percent. SOURCE: ABC-CBS News | ||
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