Section 3
SEC. 3. Section Nine of the same Act is hereby repealed in toto, any provision of law to the contrary notwithstanding and in lieu thereof, the following special export incentives, may be availed of by a registered enterprise. "SEC. 9. Special Export Incentives for Registered Enterprises. — Registered enterprises may be entitled to the following special incentives for exports of their registered products and commodities: "(a) Special Tax Credit. — A tax credit equivalent to the sales, compensating and specific taxes and duties on the supplies, raw materials and semi-manufactured products used in the manufacture, processing or production of its export products and forming part thereof, whether exported directly by the registered enterprise or sold to another export producer which uses such sold product as a direct input in export products manufactured or processed by it and subsequently exported, or to an export trader: Provided, That the tax credit shall accrue to the registered enterprise only after the export producer or export trader has in fact exported the products of the export producer or those in the manufacture or processing of which such inputs were used. "(b) Reduced Income Tax. — Registered enterprises shall be entitled for the first five years from its registration, to deduct from its taxable income an amount equivalent to the sum of the direct labor cost and local raw materials utilized in the manufacture of its completely finished export products: Provided, however, That such deduction shall in no case exceed twenty-five per centum (25%) of its total export revenue. "Before registered enterprises may avail themselves of the foregoing export incentives benefits, they shall apply first with the Board, which shall approve the application upon proof: (1) that the enterprise proposes to engage in good faith in creating a market for its products abroad; (2) that the product to be exported is one included in the government priorities plan as suitable for export, or if not so included, that its export will not adversely affect the needs of the domestic market for the finished product to be exported or for the domestic raw materials used in its manufacture; (3) that the enterprise has or will set up an adequate accounting system to segregate revenues, purchases and expenses of its export market operations from those of its domestic market operations; and (4) that the exported products and commodities meet the standards of quality established by the Bureau of Standards or, in default thereof, by the Board. "The Board may suspend or cancel wholly or partially the above deduction under this section whenever any action is threatened or taken by an international association or foreign nation which would nullify the purposes of said incentive and would impair or threaten to impair the export trade of the Philippines or its relations with other nations."