THE Philippine Economic Zone Authority (Peza) has passed its final appeal to the Senate for the retention of its powers, authority and fiscal incentives being granted to its registered enterprises, as the Senate deliberates the passage of the “Corporate Recovery and Tax Incentives for Enterprises Act,” most commonly known as the Create bill.
“While Peza fully supports the goals of rationalizing corporate incentives, the current situation of the global economy is not the appropriate time to change the current incentives’ regime. What the country needs now is stable economic policies and guarantee the sanctity of existing contracts. The Philippine government must focus on reducing the cost of doing business and increase the international competitiveness of the Philippines in export-oriented industries,” said Peza Director General Charito Plaza in a statement.
Under the Create bill, Peza incentives which include income tax holiday, duty-free importation of raw materials and capital equipment, domestic sales allowance, and exemption from payment of local government taxes and fees will be “modernized” including the tax breaks of select investors.
Appeal
In the context of the global pandemic, Peza reiterated its appeal for the retention and enhancement of the current fiscal incentives and the additional of non-fiscal incentives.
“The disastrous effects of the pandemic to our economy supports the position of Peza all along for the continued grant of incentives under Republic Act 7916, as amended and at the same time its further enhancement to make the country more competitive, to keep the existing investors and to attract more foreign investments,” the Peza chief said.
In its letter to Sen. Pia Cayetano on Sept. 21, 2020, the Mactan Export Processing Zone Chamber of Exporters and Manufacturers noted that, “Because of its incentives, Peza enjoys the trust and confidence of companies both from its parent, local and subsidiaries worldwide. That is why they should retain its authority to grant incentives to its registered export-oriented enterprises.”
Peza also explained that the appeal for continuous retention and enhanced incentives at this time of the pandemic affords stability and confidence among registered enterprises and sustains the reputation of the government that it honors and respects existing contracts and/or agreements.
Moreover, Peza also maintains its recommendation that the Create bill should be implemented first for the domestic enterprises as they will benefit the most from the reduction of the corporate income tax and enjoy for the first time incentives in a rationalized manner. It said this will in turn maximize the micro, small and medium enterprises production, manufacturing export capabilities, complete supply chain and encourage exporters to minimize import dependence.
Retention of authority
The agency also calls for the retention of its authority to administer and manage its existing ecozones and to recommend the proclamation of new ones, which will be repealed and/or amended by certain sections under the proposed bill.
“Amending these powers of the Peza Board and the general powers and authority of Peza will cripple the authority and render it as an ineffective investment promotions agency. These provisions should be retained in our Charter since their amendment will create a vacuum in the management and regulation of Peza-registered economic zones,” noted Plaza. / JOB WITH PR