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Republic of the Philippines alii 4013 i
HOUSE OF REPRESENTATIVES

Quezon City, Philippines

SIXTEENTH CONGRESS
First Regular Session

House BILLNo._1204

INTRODUCED BY REP. MARCELINO “MARCY” R. TEODORO

EXPLANATORY NOTE

Republic Act No. 9290, otherwise known as the Footwear, Leather Goods and

Tannery Industries Development Act, was enacted in April 2004 to recognize the
footwear, leather goods and tannery industries’ potential to generate employment, as
well as, increase the country's foreign exchange earnings through export and import
substitutes.

Through the said Act, the State sought to support, promote and encourage the

growth and development of the small and medium scale enterprises (SMEs) belonging
to the abovementioned industries. One of the more important provisions of the law
include the 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 Republic Act No. 9290, these industries

are still facing a great obstacle with many firms closing or folding up. According to the
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, urgent approval of this bill is sincerely sought.

-
MARCELINO “MARCY” R, TEODORO

Representative
(st District, City of Marikina


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

SIXTEENTH CONGRESS
First Regular Session

House BiLLNo,__ 1204

INTRODUCED BY REP. 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 THIS 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 Republic Act No. 9290 is hereby amended to 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 of the, 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;

©) 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 purchased supplies, raw materials and semi-
manufactured products equivalent to one hundred percent (100%) of the
value of national internal revenue taxes and custom duties that would
have been paid had these items been imported.”

SEC. 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.

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

Approved,