New Clark incentives eyed
By Elaine Ruzul S. Ramos
Manila Standard
The government is studying two options that will allow companies in various economic zones to retain their incentives despite an adverse Supreme Court ruling.
Trade and Industry Secretary Peter Favila told reporters the government was looking into the possibility of having the locators registered with the Board of Investments (BoI) or the Philippine Economic Zone Authority (Peza).
“We could also declare (Clark and Camp John Hay) as one huge customs bonded warehouse so they can avail of the 5 percent gross income tax that they currently enjoy under the charter of their ecozones, then have them registered with BoI,” Favila said.
He said the Peza registration would restore the fiscal incentives of companies operating in Clark Special Economic Zone (CSEZ) and Camp John Hay but the zone is limited to exporters.
Favila said he had discussions with Finance Secretary Margarito Teves and Customs Commissioner Napoleon Morales on the legality of the options pending amendments to the incentives bill on special economic zones in Congress.
“We want to give them a scenario where there is no change in incentives. After all investors came here in the Philippines in good faith. These incentives, both fiscal and nonfiscal, were among the reasons that enticed them to locate their operations in the country,” Favila said.
The government earlier considered the possibility of automatically granting CSEZ locators with the same perks and incentives enjoyed by companies registered with the BoI.
“We are considering automatic BoI registration instead of having the locators go through the process of applying for BoI incentives in lieu of the incentives under the Clark charter. However, we need to study the legal implications of such move,” Favila said in an earlier interview.
The BoI and Clark Development Corp. have drawn up a scheme to allow new locators at the CSEZ to avail of incentives granted to BoI-registered firms.
BoI managing head Elmer Hernandez said the scheme was an interim measure pending the incentives bill in Congress.
But he said that Clark locators must first meet BoI requirements in order to avail of the incentives.
The BoI requires that a sector must be among those listed in the Investments Priorities Plan of 2005. If it is a foreign company, it needs to export 70 percent of total production while local firms are required ship out 50 percent of total production.
BoI incentives include income tax holidays of six years for projects with pioneer status and duty rebate and value-added tax refund once the company starts exporting.
The Supreme Court earlier ruled that RA 7227, the law creating special economic zones under the Bases Conversion Development Authority, provided incentives only to investors in the Subic Freeport and Special Economic Zone and not to other special economic zones established by executive proclamations under authority of the same law
Manila Standard
The government is studying two options that will allow companies in various economic zones to retain their incentives despite an adverse Supreme Court ruling.
Trade and Industry Secretary Peter Favila told reporters the government was looking into the possibility of having the locators registered with the Board of Investments (BoI) or the Philippine Economic Zone Authority (Peza).
“We could also declare (Clark and Camp John Hay) as one huge customs bonded warehouse so they can avail of the 5 percent gross income tax that they currently enjoy under the charter of their ecozones, then have them registered with BoI,” Favila said.
He said the Peza registration would restore the fiscal incentives of companies operating in Clark Special Economic Zone (CSEZ) and Camp John Hay but the zone is limited to exporters.
Favila said he had discussions with Finance Secretary Margarito Teves and Customs Commissioner Napoleon Morales on the legality of the options pending amendments to the incentives bill on special economic zones in Congress.
“We want to give them a scenario where there is no change in incentives. After all investors came here in the Philippines in good faith. These incentives, both fiscal and nonfiscal, were among the reasons that enticed them to locate their operations in the country,” Favila said.
The government earlier considered the possibility of automatically granting CSEZ locators with the same perks and incentives enjoyed by companies registered with the BoI.
“We are considering automatic BoI registration instead of having the locators go through the process of applying for BoI incentives in lieu of the incentives under the Clark charter. However, we need to study the legal implications of such move,” Favila said in an earlier interview.
The BoI and Clark Development Corp. have drawn up a scheme to allow new locators at the CSEZ to avail of incentives granted to BoI-registered firms.
BoI managing head Elmer Hernandez said the scheme was an interim measure pending the incentives bill in Congress.
But he said that Clark locators must first meet BoI requirements in order to avail of the incentives.
The BoI requires that a sector must be among those listed in the Investments Priorities Plan of 2005. If it is a foreign company, it needs to export 70 percent of total production while local firms are required ship out 50 percent of total production.
BoI incentives include income tax holidays of six years for projects with pioneer status and duty rebate and value-added tax refund once the company starts exporting.
The Supreme Court earlier ruled that RA 7227, the law creating special economic zones under the Bases Conversion Development Authority, provided incentives only to investors in the Subic Freeport and Special Economic Zone and not to other special economic zones established by executive proclamations under authority of the same law
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