Newsletter
APPLICABLE SCOPE OF ARTICLE 30 OF THE STATUTE FOR ENCOURAGEMENT OF PRIVATE PARTICIPATION IN TRANSPORTATION INFRASTRUCTURE PROJECTS
Article 30 of the Statute for Encouragement of Private Participation in Transportation Infrastructure Projects provides that private entities eligible for incentives under the Statute may enjoy duty-free importation of, or payment in installments of import duty for, machinery and equipment for use in public transportation projects. Because the phrase "private entities eligible for incentives under the Statute" usually refers to concessionaires specially formed for BOT projects, the question arises as to whether the aforementioned tax breaks also apply to contractors or subcontractors that participate in projects or actually undertake the work.
Reportedly, the Ministry of Finance intends to permit certain latitude for interpretation of Article 30 so that contractors or subcontractors importing machinery and equipment for use in projects may also apply for import duty exemption or payment-by-installment. This interpretation is expected to have a considerable bearing on the smooth execution of BOT projects. We will continue to monitor further developments and keep our readers informed.