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Thursday, May 25, 2006
Mayor fears loss of revenues
Fearing huge losses in revenues, Cebu City Mayor Tomas Osmeña advised local business leaders to analyze the over-all impact of making the entire province an economic zone (ecozone), before finalizing it.
While it is good to have ecozones in a locality, it could also be detrimental to local government units (LGUs) that will have to deal with tax exemptions, he said.
“My concern is the tax exemption. What will we do? How will we make up for all the losses when that’s a very big share of our income? Right now we can’t even collect business taxes,” Osmeña said.
He also asked the proponents of the ecozone project to clarify what an ecozone means in this case and how they intend to operate it.
“We can’t just say yes to this. Let’s be intelligent about it and tell us exactly what the over-all impact is... Let’s be very careful with what we ask for and let’s keep our feet on the ground,” he continued.
The mayor said, though, that he is still willing to work with the proponents of the ecozone.
At the Capitol, Gov. Gwendolyn Garcia said she supports the proposal because it will benefit the towns, with job creation and increase in real estate value.
Cebu Chamber of Commerce and Industry (CCCI) president Francis Monera said in a separate interview that Osmeña’s concerns as well as those of other local governments will be addressed.
“We are still in the study stage. Lost of revenues for LGUs will be factored with the development,” Monera said.
The CCCI board of trustees decided to add more technical people in the study group so all issues and concerns will be taken up.
During the induction of new CCCI officers last Tuesday, President Arroyo prodded the businessmen to work on the ecozone, as she favors it.
A presidential proclamation is needed for declaring an ecozone.
CCCI former president Roberto Go said an ecozone will draw bigger capital to Cebu, like what happened in the Bahamas and Labuan island in Malaysia where multinational corporations put up headquarters there.
“We will (make sure) that Cebu will not be at the losing end, otherwise we will not go ahead with the plan,” Go said, referring to Osmeña’s apprehension.
Governor Garcia and the CCCI had previous talks about the plan and she already signified her support “because this can only redound to the benefit of the local government units in the province.”
“In an island that is at the center and where our best resource is our human resources and our orientation is more really towards the service and manufacturing industry, this means more jobs for our constituents and real estate values will shoot up as soon investments are be put up in our different towns and cities,” she said.
Locators in an ecozone will enjoy income tax holiday and duty free importation of capital equipment.
If he had his way, Osmeña said ecozones should be established in provinces that do not have such facility yet and locators who invest in the area should be exempted from the Minimum Wage Law for 10 years.
This, he said, is his proposal to address unemployment problems, which the CCCI had in mind when they proposed the ecozone in Cebu.
Such setup would also keep people in their hometowns and will not have to come to Cebu City or the neighboring cities for employment.
In a news conference yesterday, Osmeña said Cebu should learn from Naga City and Zam-boanga, which were successful in putting up ecozones, but did not have locators to invest there.
“We should be very careful and realize that you can’t legislate sully and demand. We have to make our decisions based on the market conditions. Some people think that just because you pass a law, everything will become a reality,” he said. (LCR/AIV/MBG)
For Bisaya stories from Cebu. Click here. (May 25, 2006 issue)
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