MANILA -- The Department of Trade and Industry (DTI) reassured stakeholders about the government’s continued support to boost the local automotive industry through incentives.
During the launch of Toyota Motor Philippines Corp.’s (TMPC) Vios FMC Thursday, Trade Secretary Ramon Lopez said the administration continues to implement the Comprehensive Automotive Resurgence Strategy (CARS) Program that was initiated by the previous administration.
The CARS Program aims to increase investments in local motor vehicle manufacturing and promote local sourcing of materials used in the assembly process. TMPC’s Vios FMC is also enrolled in the CARS Program. “The CARS Program is at the heart of our Manufacturing Resurgence Program (MRP). With MRP, we will rebuild existing capacity of our local industries, strengthen new ones, and maintain their competitiveness,” Lopez said.
“More importantly, this program -- among the many initiatives under the Duterte administration --will help us create more jobs and income opportunities for our people as mandated by the President,” he added.
Aside from the CARS Program, Lopez said the department has an ongoing review on the Motor Vehicle Development Program (MDVP). “We also want to point out that the MVDP 2.0 will incentivize scale in local production, based on a technology roadmap that is being developed,” he said.
The trade chief mentioned that the second package of the Tax Reform for Acceleration and Inclusion (TRAIN) will offer incentives “beyond the income tax holiday”. These include a reduced corporate income tax rate of 15 percent, tax allowance for investment up to 50 percent, double deduction for research and development, additional deduction for labor expenses, and 100 percent deduction on infrastructure.
“These more modern and high-powered incentives are necessary, especially as we prepare industries and the country for future production,” Lopez said, noting that these government policies also aim to help the automotive industry face current market challenges.
In the first semester of 2018, both sales of vehicle manufacturers and importers in the country declined their sales by 13 percent and 11 percent, respectively. The decrements in sales were attributed to consumers’ adjustment to the new tax regime, which slaps higher excise taxes on automotive vehicles. (PNA)
