Govt reviews Hyundai’s perks
The government is reviewing the tax incentives received by Hyundai Asia Resources Inc. amid the delay in its car assembly operations, Trade Secretary and Board of Investments chairman Ramon Lopez said Monday.
“Based on previous communications, the car company said they have stated in their application that they are yet to start assembly of cars and would need a little more time to do that. Details of the case are still unclear and we have the BoI technical team to look into the case,” Lopez said.
Hyundai Asia Resources was supposed to start assembling vehicles in the country under the old Motor Vehicle Development Program and received tax rebates of as much as P900 million.
Lopez said the company filed a petition with the BoI to review its car assembly registration before the government could decide with finality to revoke the accreditation under MVDP.
MVDP is an older version of the Comprehensive Automotive Resurgence Strategy program that offered tax rebates and income tax holiday to participants.
Lopez said Hyundai was in constant communication with the department to defend its availment of tax incentives while it had yet to start car assembly.
The Trade Department earlier recommended that Hyundai Asia Resources either refund the P900 million it got as tax rebate or lose its accreditation under MVDP.
Lopez said BoI would check if Hyundai really stopped importing semi-knocked down vehicles. “We still need to verify this piece of information , if they indeed voluntarily stopped importation or not,” he said.
A site visit to the P2-billion assembly plant of Hyundai in Sta. Rosa, Laguna in April 2017 found that the company was importing semi knocked-down units of Eon and HR 350 vans, instead of knocked-down units. SKD imports are slapped with 20-percent tariff while KD imports get 0 to 1 percent tariff.
The Trade Department asked the Bureau of Customs to determine if the case was technical smuggling.
Hyundai also faces sanctions or penalties for non-compliance to assembly commitments under the MVDP, Lopez said.
Officials of Hyundai Asia Resources claimed the production of small car Eon started in March 2017 while the assembly of commercial van H350 began in April.
Hyundai Asia Resources earlier said it planned to assemble 10,000 units of Eon and 1,000 units of H350.
Hyundai sold 3,273 units vehicles in August, up 17 percent from 2,798 units it delivered a year ago.
Sales of the Korean brand in the first eight months also increased 9 percent to 24,233 units from 22,134 units registered in the same period in 2016.