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The Bureau of Customs has issued guidelines for the processing of tax payment certificate (TPC) transactions under the Comprehensive Automotive Resurgence Strategy (CARS) Program
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Customs Administrative Order 04-2021 contains rules on the use of TPCs as payment of customs duties and taxes due on imports by eligible and registered participants (ERP) of the CARS Program
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ERPs are car makers, parts makers and shared testing service providers registered under the CARS Program
The Bureau of Customs (BOC) has issued guidelines for processing of tax payment certificate (TPC) transactions under the Comprehensive Automotive Resurgence Strategy (CARS) Program.
Customs Administrative Order (CAO) No. 04-2021 contains rules for the use of TPCs as payment of customs duties and taxes due on importations by eligible and registered participants of the CARS Program. The CAO was signed by Finance Secretary Carlos Dominguez III on June 16 and Customs Commissioner Rey Leonardo Guerrero on June 15.
CAO 04-2021 implements Sections 4.3 and 6 of the Department of Finance, Department of Budget and Management as well as Board of Investments (BOI) Joint Administrative Order (JAO) No. 01-2015.
JAO 01-2015 covers rules on the TPC mechanism that will implement fiscal support for the CARS Program under Executive Order (EO) No. 182.
The CARS Program aims to attract new investments, stimulate demand and implement industry regulations that will revitalize the Philippine automotive industry, and develop the country as a regional automotive manufacturing hub. It provides time-bound and output or performance-based fiscal support to attract strategic investments in the manufacturing of motor vehicles and parts.
TPC is a non-transferable certificate issued by BOI, upon recommendation of the CARS Inter-Agency Committee and based on third-party audit of eligible and registered participants’ applications to determine compliance with all conditions for availment of incentives.
The TPC should be used to defray tax and duty obligation of eligible registered participants (ERP) of the program to the national government.
ERPs are participating car makers, parts makers and shared testing service providers registered under the CARS Program.
Under CAO 04-2021, BOC should recognize and accept the TPC issued by BOI as payment of duties and taxes once it is verified and validated through the online facility system established by BOI for the purpose.
The TPC should have a validity period of 30 days, counted from the date of issuance, presumed as the date indicated on the face of the TPC.
The ERP should ensure that the issuance of the TPC is valid within the statutory deadlines for payment of duties and taxes on its importation. Thus, TPC has to be presented immediately to BOC for payment.
A TPC can only be used on importations during the ERP’s operations.
If, upon assessment, the amount indicated in the TPC is insufficient to cover the payable duties and taxes, the ERP should pay the balance in cash through its nominated authorized agent bank. Any other discrepancy in the assessment will be covered under Section 428 (Assessment of Duty on Less Than Entered Value) of Republic Act No. 10863, otherwise known as the Customs Modernization and Tariff Act (CMTA).
Fees and other charges, penalties and surcharges will not be covered by the TPC.
BOC will temporarily use the facility under its Electronic-to-Mobile payment system to allow payments using tax credit certificates (TCC). Once generated, the amount in the TCC will correspond to the amount in the TPC. BOC’s Collection Service will also recommend the issuance of a tax debit memo.
CAO 04-2021 takes effect immediately once published in the Official Gazette or a newspaper of general circulation.
