Tax incentives and benefits—we commonly know them to be associated with PEZA, BOI, and other IPA-registered enterprises. But do you know that such tax reduction schemes are also offered to manufacturers of our most prized possessions, i.e., the Jewelry Industry?
For any enterprise engaged, in any aspect, in the manufacture of goods commonly or commercially known as fine and imitation jewelry, Republic Act (R.A.) No. 8502 or the “Jewelry Industry Development Act of 1998,” is worth a view.
Enacted way back on February 13, 1998, the Act proffered the following incentives to qualified jewelry enterprises:
(a) Zero (0) duty on imported raw materials1, such as precious/fine metals, loose gems, jewelry parts, accessories, and supplies for use by Qualified Jewelry Enterprise2;
(b) Exemption from excise tax on jewelry goods3;
(c) Zero (0) duty on imported capital equipment, including spare parts and tools thereof4;
(d) Additional deduction from taxable income of fifty percent (50%) for approved training schemes;
(e) Gold and silver sales by the Bangko Sentral ng Pilipinas under minimal margins;
(f) Authority to buy gold and silver directly from other sources without any specific authority from the Bangko Sentral ng Pilipinas, except sale of gold and silver from small-scale miners5;
(g) Inclusion of locally manufactured jewelry products in the government’s tourist duty free shops, including the promotion, advertisement, and sale of jewelry products; and
(h) Eligibility for incentives provided by other special laws, such as: (1) R.A. No. 7844 (Export Development Act of 1994); (2) R.A. No. 7916 (Special Economic Zone of 1995); and (3) Executive Order No. 226 (BOI Omnibus Investment Code). Provided that, the jewelry enterprise shall register under the aforestated laws, or that the activity is export-oriented, and that there is no double availment of the same incentives.
In 2004, Joint DTI-DOF-BOC-BIR Administrative Order No. 01 designated the Board of Investments (BOI), under the Department of Trade and Industry (DTI), in assisting the latter in the monitoring, overseeing and supervision related to the implementation of the Act and its Rules and Regulations. The Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR) were also designated by the Department of Finance (DOF) to implement the grant of development incentives under Section 3 (a), (b), (c), (d) and (h) of R.A. No. 8502.
Among the above-mentioned incentives, the BOI shares that accredited enterprises mostly enjoy the excise tax exemption for imported raw materials and export of finished products.
An Update
Through the years, the Philippine Government has consistently made efforts to support the jewelry industry.
One development to this end is the recently inked Memorandum of Agreement (MOA) between the City Government of Meycauayan, Bulacan and the Philippine Board of Investments (BOI) on June 26, 2023, which sealed the latter’s commitment to help drive growth in the jewelry industry.
Under the MOA, the BOI will provide technical support to Meycauayan, Bulacan, by giving consultations and organizing workshops, seminars, and capacity-building initiatives. The BOI will also promote the city as a jewelry hub—a top-tier investment destination6.
Aside from RA 8502, the Philippine Government’s support to the jewelry industry is also apparent in several laws that were passed in recent years.
RA 11904, or the “Philippine Creative Industries Development”, which lapsed into law on July 27, 2023, seeks to promote and support the development of Philippine creative industries, among which, the jewelry business is listed under the Design domain.7
Additionally, the jewelry sector is also a Tier 1 priority under the Philippines’ 2022 Strategic Investment Priority Plan (SIPP). This means that the industry is one of the government’s focus areas for investment promotion, as mandated by Executive Order (EO) No. or the “Omnibus Investment Code of 1987.”
A Bright Future
Indeed, with the tax-saving incentives offered by RA 8502 and the promotion assistance from the Philippine Government, Jewelry Enterprises in the country have a huge opportunity to grow their market and bag even more gold in the years to come.
Investors should not miss this shining opportunity.
Indeed, with the tax-saving incentives offered by RA 8502 and the promotion assistance from the Philippine Government, Jewelry Enterprises in the country have an opportunity to grow their market and bag gold in the coming years. Investors should definitely not miss this opportunity.
Babylon2k’s BOI ACCREDITATION OF JEWELRY ENTERPRISES (Service Code: FF0530) service is designed to help Jewelry Enterprises like yours maximize the benefits of RA 8502. We can assist you with:
- New Application for Accreditation
- Renewal of Accreditation
- Business Registration
- BIR Registration
- Import Permit (if applicable): Certificate from BOC’s CIIS.
- Mayor’s Permit or City/Municipal Permit
- Financial Statements for new businesses and existing businesses
- Sworn Statement
- Annual Information Return with attachments.
- Annual Reports
Babylon2k’s services has corresponding service codes (e.g., FF0530, GG0020). When you’re ready to get started, simply request a quote here and enter the relevant service code(s) to ensure we can connect you with the perfect Babylon2k specialist for your needs.
Do you want to know more about how we can help? It’s easy!
Additionally, for those seeking more general information on RA 8502, you can visit the BOI website: https://boi.gov.ph/revised-rules-and-regulations-implementing-r-a-8502/.
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1 The raw materials are enumerated in Annex “A” of the Administrative Order.
2 As specifically mentioned in Chapter 5 of Section I, Chapter 12 of Section II, Chapters 25, 26 and 27 of Section V, Chapters 28, 34 and 38 of Section VI, Chapter 70 of Section XIII, Chapter 71 of Section XIV, Chapter 83 of Section XV, and Chapter 96 of Section XX of the Tariff and Customs Code, as amended.
3 As specifically mentioned in Section 150 (a) of the National Internal Revenue Code (NIRC) of the Philippines, as amended, and enumerated in Annex “C” of the Administrative Order.
4 Those that fall 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 as amended, and enumerated in Annex “B” of the Administrative Order.
5 Mandated to be sold to the Bangko Sentral ng Pilipinas by R.A. No. 7076, People’s Small Scale Mining Act of 1991.
7 http://dtiwebfiles.s3.ap-southeast-1.amazonaws.com/Laws+and+Policies/Related+Laws/Creative+Industries+Development+Act+IRR+(1).pdf
