THE Mactan Export Processing Zone Chamber of Exporters and Manufacturers (Mepzcem) is putting pressure on the Lapu-Lapu City Council to make a “solid stand” on the ongoing discussions on the possible relocation of the 150 Mactan Economic Zone (MEZ) 1 locators to accommodate a second runway.
Mepzcem president Santhana Krishnan Vaidiswaran said the Lapu-Lapu City Goverment could lose a significant amount of taxes paid by the locators and see about 60,000 workers losing their livelihood.
“We are okay with the idea of the second runway. It’s just the current proposal displaces the 150 locators, 60,000 employees and the whole impact on the economy. We want to understand what the stand of the city council is,” he said.
The Council position will help the National Economic and Development Authority (Neda) decide on what to do with MEZ 1.
Capsule laying
Meanwhile, construction of a parallel taxiway or secondary or emergency runway at the Airside of the Mactan-Cebu International Airport (MCIA) broke ground Tuesday, January 14, 2020. This is an MCIA Authority (MCIAA) project.
This is not the second runway whose construction will affect the MEZ 1 locators. The proposal for that, a GMR Megawide project, is still under consideration by Neda.
MCIAA officers, Lapu-Lapu City Mayor Junard Chan, Cebu City Representative Raul del Mar and project contractor Duros laid the time capsule of the parallel runway, which is targeted for completion in 2022.
Vaidiswaran said aside from the issue of their possible relocation, the looming Corporate Income Tax and Incentives Rationalization Act (Citira) is also not helping the locators decide whether to stay in the Philippines or move to another country.
“It has already caused uncertainty to current investors as well as potential investors. A lot of companies have already put all their expansion plans on hold. If the second runway will be approved and the Citira will be on the loose, a lot of companies have indicated in the survey we conducted that they’d rather... locate to another country,” he said.
Data by the Philippine Economic Zone Authority (Peza) provided to SunStar Cebu showed lease contracts of 60 locators will expire in the years 2020 to 2030, 26 in 2031 to 2040, 33 in 2041 to 2050, 19 in 2051 to 2060 and 19 in 2061 to 2070.
This would mean loss of business and employment as well as taxes paid to the government.
The Citira bill seeks to remove the option for corporations, including resident foreign corporations, to avail of the 15 percent gross income tax.
Corporate taxpayers who enjoy preferential rates, such as regional operating headquarters and offshore banking units, will now have to pay the uniform corporate income tax as regional operating headquarters and offshore banking units that currently pay 10 percent.
Resident foreign corporations and non-resident foreign corporations, which currently pay 30 percent, will pay the reduced rates.
Earlier, Peza director general Charito Plaza said displacing the MEZ 1 locators would result in economic losses of P150 billion.
MCIAA general manager Steve Dicdican said Plaza’s claim was unfounded. He said there is a need to compromise for the airport to grow without disrupting the MEZ 1 locators’ operations. (JOB)