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Tuesday, April 05, 2005
Tax notes: Regulations for economic zones
IN a March 18, 2005 memorandum, Finance Secretary Cesar Purisima requested Bureau of Internal Revenue Commissioner Guillermo Parayno to suspend the effectivity of Revenue Regulations 2-2005, in view of issues raised by business groups on the reasonableness of the regulations.
Finance Under-secretary Emanuel Bonoan and Deputy Commissioner Kim Jacinto-Henares were instructed to review the concerns raised and, if necessary, to propose changes to the regulations.
RR 2-2005 was supposed to take effect on March 5. RR 2-2005 introduced significant changes in the taxation of enterprises registered with the Philippine Economic Zone Authority, Subic Bay Metropolitan Authority, and the Zamboanga and Cagayan special economic zones. Among the changes introduced were the following:
(1) amendments to the definition of “Gross Income Earned” (GIE);
(2) omission of depreciation on buildings owned and/or constructed among the list of allowable deductions in computing GIE; and
(3) imposition of the regular income tax on all income of enterprises registered with Peza, SBMA, and Zamboanga and Cagayan Ecozones generated from sources within the Customs Territory; and
The amendatory regulations are already being finalized. (Source: Punongbayan & Araullo)
(April 5, 2005 issue)
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