THE Philippines needs to have more economic zones (ecozones) accredited by the Philippine Economic Zone Authority (Peza) designed for information and communications technology (ICT) enterprises, an industry leader said.
Lawyer Jocelle Batapa-Sigue, trustee and head of the public sector and policy committee of the National Information and Communications Confederation of the Philippines (NICP), on Tuesday, July 4, said there is a need to have flexible ecozones capable of housing big locators and accommodate small to medium ICT startups at the same time.
“We should help local ICT companies by providing them incentives through Peza,” Batapa-Sigue said, adding that “it is only now that Filipinos are joining the global industry.”
ICT enterprises within ecozones can avail incentives like 100 percent exemption from corporate income tax.
Non-pioneer projects have an incentive of income tax holiday for four years, and six years for pioneer project. Extension may be granted if projects comply with the set criteria.
Other incentives include, among others, value-added tax zero-rating of local purchases of goods and services, including land-based telecommunications, electrical power, water bills, and lease on the building, subject to compliance with Bureau of Internal Revenue and Peza requirements.
They can also be exempted from payment of any and all local government imposts, fees, licenses or taxes.
In Negros Occidental, there are currently 19 ecozones, mostly in Bacolod City, hosting various scales of ICT-related enterprises.
Batapa-Sigue, the executive director of the Bacolod-Negros Occidental Federation for Information and Communications Technology (BNEFIT), said the real estate sector in the city had pushed for ecozones started since 2004 through the crafting of Bacolod ICT Investments Program
SM Prime and Ayala Land are set to add about 20,000 square meters of Peza ecozones in Bacolod next year.
This is on top of the Phase II project of the Negros First Cyber Centre, Batapa-Sigue said.
“We will have enough ecozones in Bacolod. In fact, about 40 percent of the existing zones are not filled yet thus, many locators are coming in,” she said, adding that “without Peza ecozones, the city would have not grown this big.”
The problem, however, is the possible reduction and deletion of incentives granted to ICT enterprises in these ecozones.
The NICP had earlier urged President Rodrigo Duterte and the Congress to retain and expand the current fiscal incentives of ICT-business process management companies under the proposed tax reforms.
It pointed out that introducing value-added tax on business process outsourcing services and imposition of new taxes on the ICT industry could have very damaging repercussions to growth, expansion, and sustainability in the countryside.
Batapa-Sigue said that based on the recent pronouncements of Trade and Industry Secretary Ramon Lopez and other national officials, they consider the ICT industry as one of the biggest contributors to employment and revenues.
“With this, I take it to mean that they are continuing the tax incentives. This is a positive indication which makes us optimistic,” she added.