Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
Second Regular Session

House BiliNo._ 9079

INTRODUCED BY HON. MARCELINO “MARCY” R, TEODORO

EXPLANATORY NOTE

Republic Act No. 9290, otherwise known as the Footwear, Leather Goods and
Tannery Industries Development Act, was enacted April 2004 to recognize the footwear,
leather goods and tannery industries’ potential to generate employment, as well as,
increase the country’s foreign exchange eamings through exports and import
‘Substitutes.

Through the said Act the State sought to support, promote and encourage th
growth and development of the small and medium scale enterprises (SMEs) paecanes
to the abovementioned industries, 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 2
great obstacle with many firms closing or folding up. According to an NSO data from
2005 to 2009, the footwear industry suffered a 14% decline in employment and a 7%
decline in establishments.

Thus, the proposed measure seeks to remove the limited period provided in
Section 3 of Republic Act No. 9290 so industry players can continue to avail the
incentives under the law and help them overcome the challenges of trade globalization.

In light of the foregoing, passage of this bill is earnestly sought.

am
Ve Ses Pate
MARCELINO “MARCY” R. TEODORO

Representative, 1" District
City of Marikina



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
Second Regular Session

House Bill No._9E79

INTRODUCED BY HON. MARCELINO “MARCY” R. TEODORO

AN ACT ¥
REMOVING THE PERIOD WITHIN WHICH TO AVAIL THE DEVELOPMENT
INCENTIVES PROVIDED UNDER REPUBLIC ACT NO. 9290, OTHERWISE KNOWN
AS THE FOOTWEAR, LEATHER GOODS AND TANNERY INDUSTRIES
DEVELOPMENT ACT, AMENDING FOR THE PURPOSE SECTION 3 THEREOF

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Section 3 of the Republic Act No. 9290 is hereby amended and shall
read as follows:

Section 3. Development Incentives. - The following incentives shall be available to
qualified footwear, leather goods and tannery enterprises [ for a maximum period of ten
(10) years from the effectivity of this Act } :

a. Entitlement to zero (0) duty on imported capital equipment, including
machinery equipment, tools for basic components, parts and accessories,
including chemicals falling within Chapter 69 of Section XIII, Chapter 82 of
Section XV, Chapters 84 and 85 of Section XVI, and Chapter 90 of Section
XVIII of the Tariff and Customs Code of the Philippines, as amended;

b. Additional deduction from gross_income of fifty percent (50%) of the
expenses incurred in training programs approved by the appropriate
agency which shall be deductible during the fiscal year when the expenses
were incurred;

c. Inclusion, promotion, advertising and sale of locally manufactured
finished products of these industries in the government's duty-free shops;
and

d. Tax credits on domestically purchases supplies, raw materials and
semi-manufactured products equivalent to one hundred percent (100%) of
the value of national internal revenue taxes and customs duties that would
have been paid had these items been imported.

SECTION 2. Implementing Rules and Regulations. - The Secretary of Finance,
Governor of the Bangko Sentral ng Pilipinas, and Commissioner of the Securities and
Exchange Commission shall promulgate and publish the necessary rules and regulations
for the effective enforcement of the provisions of this Act.

SECTION 3. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in at least two (2) newspapers of general circulation.

Approved,