RESTORATION OF TAX INCENTIVES UNDER P.D. NO. 666

Please be informed that the Fiscal Incentives Review Board, by virtue
of FIRB Resolution No. 3-86 dated 4 February 1986, has restored the tax
and duty exemption privileges under P.D. No. 666 and can now be availed
of by MARINA-registered shipbuilding or ship repair enterprises with
valid and subsisting certificates of registration and license.

In order to avoid any confusion or misinterpretation in the
implementation of the said FIRB resolution please be clarified that:

1.  The ten-year period of availment of the tax and duty exemption
privileges fixed as a condition by the FIRB resolution for the
restoration of said privileges, which originally was applicable under Section 1 (c) of P.D. No. 666
only to the exemption from the contractor’s percentage tax has been
made likewise applicable to the exemption from import duties and taxes
under Section 1(a) of the above decree.

2.  The ten-year period shall be reckoned from the date of original
registration (not re-registration) with MARINA: provided, however, that
the period commencing 15 October 1984 to 3 February 1986 during which
the tax and duty exemption privileges were withdrawn by virtue of P.D.
1955 shall be excluded in counting the period of availment.

3.  All importations made prior to 4 February 1986 which have not
been released from Customs custody shall, upon ample proof thereof
submitted to MARINA, be recommended favorably to the Bureau of Customs.

4.  All MARINA-registered shipbuilding or ship repair enterprise
which have committed violations of the Revised Rules and Regulations to
Implement P.D. 666, mote particularly on the Shipyard Development Fund
(SDF) requirements, shall not be qualified to avail of the privileges.

Please be guided accordingly.

Adopted: 10 March 1986

(SGD.) PHILIP S. TUAZON Administrator

(SGD.) HERNANDO B. PEREZ Minister of Transportation and Communication