The House of Representatives approved on third and final reading House Bill 6524 which seeks to strengthen the powers and functions of the Authority of the Freeport Area of Bataan to make it more responsive to the demands of the international business market.
The bill principally authored by Rep. Jose Enrique Garcia III (2nd District, Bataan) seeks to amend the provisions of Republic Act No. 9728, otherwise known as the “Freeport Area of Bataan Act of 2009.”
The bill provides that the existing Bataan Economic Zone located in the Municipality of Mariveles, Bataan is hereby converted into a special economic zone and freeport, and along with other territories indicated in the Act, shall be known as the Freeport Area of Bataan (FAB).
It widens the coverage of the Bataan Freeport to include land and water territories in the Municipality of Mariveles, Bataan and all other areas which may be declared as part of FAB as provided in Section 4(g) of RA 9728.
The AFAB shall be given the power not only to acquire, but procure and/or increase, expand either through purchase, negotiation or condemnation proceedings private or public lands. This may include the respective water territories of the lands within the territorial jurisdiction of the province of Bataan, if any. Municipal waters of up to 15 kilometers from the low water mark area of the municipalities concerned shall be deemed included in the territorial waters of the FAB.
The FAB itself shall also granted exemption from payment of all national and local taxes. This includes income, withholding, donor’s, value-added, excise, percentage, documentary stamp, local business, local real property transfer, and real property taxes.
In lieu of the tax exemption, business establishments shall pay a five percent final tax on their gross income earned, with a percent each to the national government, the province of Bataan, the Treasurer’s office of the Municipality of Mariveles. Two percent will be channelled to the AFAB.
FAB enterprises may generate income from sources within the customs territory of up to 70 percent of its total income from all sources, and will be subject to tax laws of the territory should it exceed 70 percent. Meanwhile, enterprises engaged in activities that address climate change, improve disaster risk reduction and management capacity of the country, and/or deemed priority investments are allowed to generate 100% of their total income from the customs territory without loss of eligibility to the incentives of HB 6524.
The AFAB shall also have the authority to grant income tax holiday and net operating loss carry over.
Local government units and the FAB are tasked by the bill to provide an immediate and responsive mechanism to undertake best management practice through coastal zone management program to address the abuse and inappropriate exploitation of the natural environment and disrupted land use within the jurisdiction of the FAB.
The bill further expands the powers and functions of the AFAB as provided in Section 12 of RA 9728 to include exclusive enforcement and administration of the provisions of the National Building Code and the Fire Code on all building structures situated inside the FAB; exercise of police authority and maintenance of law and order within the boundaries of the FAB; the power to act as an offshore center to engage in all offshore fund activities or collective investment system as provided in applicable laws; and establishment of an all-inclusive international economic relations for the operation of regional or area headquarters within the territorial jurisdiction of FAB.
It further amends Section 21 of RA 9728 so that the capital of P 2.5 billion to be contributed by the government shall consist of all lands embraced and covered by the FAB including properties conveyed to the GSIS and/or SSS under Proclamation 740, as amended by Proclamation 900. (Congress)
