'Amend Peza charter to make ecozones more competitive'.
THE Philippine Economic Zone Authority has asked lawmakers to amend the Peza charter to improve the operations of economic zones and update the menu of fiscal incentives for locators.
Peza Director General Charito B. Plaza said it is time to introduce changes, noting that many investment promotion agencies had their fair share of charter changes lately, and such reform is needed in the Peza since its enabling law is already 24 years old.
'Unlike [the] Peza law which is already 24 years old, other investment promotion agencies have recently had their respective charters amended,' Plaza said in a statement late Tuesday.
She said the Tourism Infrastructure and Enterprise Zone Authority (Tieza) charter was overhauled in April, providing the agency the sole and exclusive jurisdiction to grant incentives to locators until December 31, 2029. Even the decade-old charter of the Authority of the Freeport of Bataan was recently amended to strengthen its roles and functions, she added.
'It is about time the Peza charter be amended due to economic imperatives and to improve the operations of economic zones in the Philippines,' Plaza explained.
Under House Bills 3654, 3747 and 3897, the Peza will no longer be under the Department of Trade and Industry (DTI) but under the Office of the President. Amending the Peza charter will also institutionalize tax perks granted to economic zone firms, and will no longer be borrowed from executive orders, and internal revenue issuances.
The charter amendment will maintain the payment of tax on gross income earned (GIE) for locators, but it will be raised to 7 percent, from 5 percent at present.
This component will be crucial in legislative discussions on whether locators will be allowed to retain their incentives. Countering this measure is the Corporate Income Tax and Incentives Rationalization Act (Citira) bill, under which locators will be forced to surrender their tax perks, including the GIE, and pay corporate tax instead.
This is also the primary reason Trade Secretary Ramon M. Lopez opposes amending the Peza charter. He said doing so will clash with government's goal to rationalize incentives under the Citira bill.
Lopez earlier told reporters the measures filed to amend the Peza charter will not prosper. He argued such move is not part of the government's tax plan, and he did not approve of it as Peza Board chairman.
In response, Plaza said Lopez was informed all along about the plan to amend the charter of the Peza.
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|Publication:||Business Mirror (Makati City, Philippines)|
|Date:||Aug 29, 2019|
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