Bill to extend leather sector support

6 February 2012

To help the footwear, leather goods and tanning industries overcome the challenges presented by trade globalisation, a lawmaker has filed a measure to allow these businesses to continue getting financial incentives.

Marcelino Teodoro (First District, Marikina City) has authored House Bill 5679 to remove the limited period provided for incentives in Section 3 of Republic Act 9290, otherwise known as the ‘Footwear, Leather Goods and Tannery Industries Development Act.’

Teodoro said RA 9290 was first enacted in April 2004 to recognise the footwear, leather goods and tanning industries’ potential to generate employment, as well as increase the country’s foreign exchange earnings through exports and import substitutes.

He said that one of the more important provisions of the law included time-bound incentives for qualified enterprises in the form of tax credits, additional deduction on gross income, zero duty on imported capital equipment and promotion, advertising and sale of locally manufactured finished products of these industries in the government’s duty-free shops.

‘Almost a decade since the enactment of RA 9290, these industries are still facing a great obstacle with many firms closing or folding up,’ Teodoro said.

In pushing for the immediate approval of the bill, Teodoro cited a 2005 to 2009 data of the Philippine National Statistics Office (NSO), saying the footwear industry suffered a 14% decline in employment and a 7% decline in the number of companies.

Teodoro also cited the declared policy of the State to support, promote and encourage the growth and development of small and medium scale enterprises (SMEs) belonging to these industries.

Under the measure, Teodoro proposed to remove the maximum 10-year period so that incentives shall be available continuously by qualified footwear, leather goods and tannery enterprises.

The Department of Finance, Bangko Sentral ng Pilipinas and the Securities Exchange Commission are directed to publish the necessary rules and regulations for the effective enforcement of the Act.

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