The streamlining of procedures for the registration of brand- new vehicles is one of the nonfiscal perks that the Board of Investments (BOI) is currently working on to entice investors to participate in the Comprehensive Automotive Resurgence Strategy (CARS) Program.
Removing the bureaucratic red tape in the registration of vehicles will entail the cooperation of the
Land Transportation Office (LTO) and the Bureau of Customs (BOC), BOI Executive Director Corazon Halili-Dichosa told the BusinessMirror.
“One of the important issues we’re looking at, especially for local assemblers, is getting the certificate of payment [COP]. We’re tackling to fix it [red tape], because it affects the whole motor-vehicle market,” Halili-Dichosa said in an interview.
Dichosa added that securing the COP from the BOC is part of the LTO’s registration process for local car assemblers and auto importers. This requirement, however, has been considered as a hurdle, especially for local assemblers.
According to Dichosa, local assemblers are faced with a burdensome process of matching the imported-vehicle parts of their complete knockdown unit with the entire vehicle unit every time the BOC is determining if they have paid the correct taxes.
“It’s only when they’ve matched the chassis, for example, with the whole vehicle that they can get a COP from the BOC. After that, the BOC can then give it to the LTO for the car’s registration. Only when they have
the LTO registration can the assembler sell the car,” Dichosa explained.
Auto importers, however, do not undergo the same process, since they bring in their vehicle units as completely built units.
A technical working group has already been formed to streamline the procedures, and the LTO has already released new guidelines for this in 2014. A bigger change, however, is needed with the looming onset of the CARS Program, which will see an increase in vehicle production from Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp., the manufacturers that are likely to participate in the program.
The CARS Program has set a requirement of a minimum 200,000-unit vehicle production over a period of six years for qualified participants. The BOI is suggesting to either do away with the COP requirement or the agency undertakes the verification process in determining the payable duties and taxes.
“Baka ’di natin kailangan ng COP per se for the local assembled cars; or kung kailangan ng COP, maybe the BOI can step in, because most of the assemblers are Motor Vehicle Development Program [MVDP] participants, and we can actually vouch whether that car is assembled in the Philippines, and if the proper tax and duties have been paid, because all importations of the MVDP participants pass through our legal system,” Dichosa said.
“We’re going to produce more cars locally, so ’yung transactions dadami. Gusto mapabilis ’yung proseso, baka mas mahirapan ’yung assemblers, and matatagalan mabenta ng assemblers ’yung kotse,” the BOI executive director said.
The BOI is eyeing to resolve this regulatory burden by year-end, as car assemblers gear up for expanded production and plan additional investments to meet the production requirement. “We’re targeting within the year to have a solution, either one of the two proposals suggested,” she added. The BOI will be implementing a set of nonfiscal measures to complement the fiscal perks offered in the CARS Program.
Aside from streamlining regulatory procedures, the CARS Program provides other nonfiscal suport, such as the implementation of the automated import and export documentation system, as well as demand-stimulating measures, such as easier financing terms.