The Bases Conversion and Development Authority (BCDA) yesterday lauded the move of the Senate committee on government corporations and public estates to provide tax amnesty and provide incentives to investors in the special economic zones in Clark, John Hay and Poro Point.
BCDA President Narciso Abaya said the quick passage of the bill will address the concern of all investors in the economic zones regarding the continued viability of their business enterprises.
Abaya also said the moves will ensure continued employment opportunities for thousands depending on the ecozone businesses for a living.
He further pointed out that more local and foreign investors will be encouraged to put their businesses with the resolution of the issue on tax incentives.
Clark, John Hay and Poro Point ecozones have a total of 447 locators providing jobs to 37,500 people.
In the proposed amnesty bill, affected locators in the three ecozones may avail of the amnesty by paying an amnesty tax rate of one peso (
P1.00) within one year after the law takes effect. They will then have to pay only five percent in gross income.
BCDA cited the inclusion of critical provisions in the bill reported out by the Committee chaired by Senator Richard Gordon. The bill, which would amend Republic Act (RA) 7227 states that incentives under the Special Economic Zone Act of 1995 would now be made available to business establishments in other social economic zones created under RA 7227.
BCDA lauds the initiatives of Senator Ralph Recto for the initiation of the passage of bills that would address the incentives problem in BCDA ecozones through the help and sponsorhip of his counterpart in the House of Representatives, Rep. Jesli Lapus. The Recto-sponsored bill will seek to amend RA 7227 and address the incentives problem in all ecozones covered by RA 7227.
BCDA also lauds Senator Juan Ponce Enrile for his invaluable contributions and insights during the various Senate hearings. The senator has signified his support in amending RA 7227.
The Supreme Court earlier ruled that tax incentives can only be given to investors in the Subic Freeport and Special Economic Zone.
That meant that locators and investors in Clark, John Hay and Poro Point lose the tax incentives they have been enjoying and will have to pay back taxes to the government. Some if not most locators indicated they would have had to close shop or move elsewhere in the face of the double tax problems.
To address the economic dislocation that would have resulted from lost business, the BCDA has earlier filed for the granting of Philippine Economic Zone Authority (PEZA) — type incentives for the three former US military bases.
"We wanted to create an investor-friendly environment in the BCDA-managed special economic zones. " Abaya pointed out.
The PEZA package may include tax holidays from four to six years.
Based on the PEZA list of incentives, aside from enjoying tax incentives, Special Economic Zones are also given the following perks and privileges:
For Ecozone Developers and Operators, they are given income tax holiday and incentives under the Build-Operate-Transfer Law (BOT Law) including government support for accessing Official Development Assistance and other sources of financing.
Another is the provision of vital off-site infrastructure facilities. They may also have the option to pay a special five percent gross income tax, in lieu of all national and local taxes.
