MANILA — Philippine Economic Zone Authority (PEZA) director general Charito Plaza revealed that industries within the economic zones together with the investment promotion agency (IPA), have contributed some PHP3.32 trilllion to the national economy as of 2015.
This was the sum of her report to the National Economic and Development Authority (NEDA) regarding the agency’s compliance to the Tax Incentives Management and Transparency Act (TIMTA) which she revealed during the 23rd anniversary of PEZA Wednesday evening.
Plaza said the amount that PEZA has so far contributed to the economy, national government, local governments as well as towards the further development of ecozones nationwide, is larger than the taxes foregone due to income tax holidays (ITH) and other tax incentives provided to PEZA-registered companies.
She cited that as of 2015, total actual investments of PEZA-registered firms reached PHP1.99 trillion, with export revenues of PHP773 billion, and local purchases amounting to PHP215 billion.
She added that total employment in ecozones hit over 1.03 million, with total salaries of PHP271 billion as of 2015.
In terms of tax contribution to the national government, PEZA industries shared PHP42 billion worth of withholding tax on compensation; PHP11 billion of expanded withholding tax; PHP7.6 billion final withholding tax; and PHP888 million of final tax withheld by banks and sources on interest income.
Registered companies were able to contribute PHP909 million on real property tax, PHP891 million on business taxes and permits, and PHP696 million on occupation taxes and others to the local government.
Plaza mentioned that based on the report of the Department of Finance (DOF), government’s foregone taxes to PEZA-registered companies reached PHP235.31 billion in 2015, which include PHP66.6 billion tax expenditures on ITH, special income tax rate, and customs duties and PHP168.7 billion tax incentives on value added tax.
But Plaza noted that the DOF’s report did not include the contribution of PEZA and other IPAs on foreign direct investments, exports, labor productivity and wages, among others.
Meanwhile, PEZA Promotions and Public Relations Group Manager Elmer San Pascual clarified that the agency’s TIMTA report to NEDA was based on reports submitted by the registered companies themselves. About 86 percent of the registered firms submitted their report to the IPA.
San Pascual added that PEZA only followed the format given by NEDA for TIMTA reporting, which requested for figures “as of 2015”.
But for 2015 alone, PEZA data showed that approved investments reached PHP295 billion, with exports amounting to USD44 billion, and adding 96,079 jobs in ecozones nationwide.
The NEDA is expected to come up with a cost-benefit analysis on investment incentives as the DOF pushes for further tax reforms, which may include the lowering of corporate income taxes and rationalizing fiscal incentives. (Kris Crismundo/PNA)
