PR
Taguig City – Philippine Economic Zone Authority (PEZA) Director General Charito B. Plaza has guaranteed the Department of Finance (DOF) the investment promotion agency’s support to the pending Corporate Income Tax and Incentives Rationalization Act (CITIRA) bill, which is now currently in the Senate. The PEZA Chief gladly announces that PEZA and the Department of Trade and Industry (DTI) reached a reconciliation and both agreed to cooperate in fine-tuning CITIRA to consider concerns of PEZA and its industries.
After a cordial meeting between PEZA Chief and DTI Secretary today during the PEZA board meeting, Plaza shared that “PEZA is 100% supportive of the CITIRA bill’s objectives and goals and wants to contribute in its enhancement and final version to ensure that it will remove the fear of its existing locators that it’s not a major tax revamp, but an enhanced one and it will continuously attract more investors to the country and empower the Filipino-owned companies, the SMEs, the farmers, and every Filipino to become part in fully industrializing the country.”
The Director General stated that “the current PEZA-registered enterprises or industries can choose between a longer transition of 5-10 years, which can ensure existing investors of the grandfather rule, or may shift to the new incentive system under CITIRA.”
Specifically, PEZA aims that its proposed increase of its current GIE tax regime from 5% to 7% will be considered in CITIRA instead of the Corporate Income Tax (CIT) rate in order to retain the one-stop-shop of PEZA for enhanced ease-of-doing-business in the ecozones.
In addition, the PEZA Chief recommended the inclusion of the following enhancements to the CITIRA bill subject to the Senate’s TWG review and consideration:
A fixed 10-year or 15-year transition period to be extended to the locators on a per project basis to provide for a common sunset period considering the usual term for the end of life of products and useful life of equipment.
Continued enjoyment of tax and duty free importation of production-related materials by ecozone locators to put them on equal footing with free port-registered enterprises.
Recognition of locators’ indirect/constructive exports as part of export sales since inter-zone sales create local value-adding and backward linkages.
Setting an amount of investments threshold for big-ticket or strategic projects that will be endorsed to the FIRB for review and confirmation. Otherwise, another option is to require other IPAs to include a DOF representation in their respective boards following the set-up of PEZA Board.
As to the reason why PEZA and DTI has reached a reconciliation of their differences on CITIRA, Plaza said that “PEZA wants to end the agony of waiting and uncertainty caused by pending tax reform that has affected new investments and expansion projects of current PEZA-registered industries.” She added that, “We want to ensure continuous investments for the Philippines and for the jobs of Filipino people.”
PEZA relies on the wisdom of the Senate and the House of Representatives for the finalization of the CITIRA bill. Nevertheless, PEZA thanks the DOF and the DTI for their openness to consider PEZA concerns on the changes in tax incentives.
Plaza thanks the DOF and the DTI for their “openness” to listen to the sentiments of the industries and stakeholders. With this, Plaza hopes a beautiful CITIRA law will be passed the soonest with the contributions of the different stakeholders. CITIRA shall be enhanced by the wise ideas of the legislators and PEZA hopes that it will attain the goals of raising the revenues of the government and in creating jobs, a better income, and life for the Filipino people.
“We intend to help craft a landmark legislation that will enhance and promote investments to the Philippines to achieve the overall welfare and good of the country and the people,” Plaza said.
PEZA will be very active in sharing suggestions for enhancements to the CITIRA bill, maintaining its best practices of one-stop-shop as part of the ease of doing business, which is one of the best practices recognized by investors and the IFC World Bank among the economic zones worldwide.
Before the discussion of CITIRA during the PEZA Board Meeting held today, PEZA Chief and officials reported about PEZA’s performance and incentives which showed that they are tried and tested and continued to contribute to the Philippine economy’s investments, exports, and job generation.
