Monday, October 09, 2006 Agency tax holiday impairs city's share
THE tax holiday availed of by export processing authorities in the country could affect the overall income of the City Government, it being host to the Philippine Export Processing Zone Authority (Peza).
"This may have a serious repercussion on the city's 2007 budget as well as the share of the host barangays from Peza's remittances," explained Councilor Leandro Yangot Jr. in a proposed resolution, as he invites Peza manager for special concerns Modesto Agyao for a discussion.
The invitation also intends to clarify the city's shares relative to the operation of Peza.
With Texas Instruments Philippines Inc. (Tipi) remitting bulk of the taxes, Yangot said inviting Peza officials to appear before the City Council could settle problems on remittances to the city and the national governments.
"There is a need to be informed and be clarified of the actual shares of the city as well as the host barangays from the firm's operation in order for the city to come up with necessary measures in anticipation to the tax holiday and the possibility of getting from the remittance made by Tipi," the councilor explained.
Republic Act (RA) 7916 or the Special Economic Zone Act of 1995 provides the mechanisms for the creation, operation and administration of special economic zones in the Philippines.
A provision of the law exempts businesses within the Peza from paying taxes, except real property taxes owned by developers. In lieu of the tax exemption, Pezas are mandated to remit three percent of its gross income to the National Government and two percent to the host city or municipality.
In the case of Tipi, all of the P1.3 billion taxes last year were reportedly remitted to the National Government. (RO)
(October 9, 2006 issue) Write letter to the editor. Click here. Join the Sun.Star message board. Click here.
