Olongapo SubicBay BatangGapo Newscenter

Sunday, May 24, 2009

SBMA seeks similar incentives for Olongapo firms

The Subic Bay Metropolitan Authority is working out a scheme that will allow new investments in nearby Olongapo City to receive some incentives enjoyed by companies registered in the Subic Bay Freeport.

SBMA administrator Armand Arreza said the perks would include fiscal incentives such as sales tax and 5-percent gross income tax.

“We are now in the process of formulating the implementing rules,” Arreza said in a statement.

He said SBMA was in talks with with Olongapo City officials to allow companies enjoy some incentives under Executive Order 675.

President Gloria Macapagal Arroyo signed the order expanding the area where tax- and duty-free privileges for free port zones would apply.

EO 675 states that the tax- and duty-free privileges within the Subic Special Economic and Free Port Zone “shall apply within the secured area consisting of the presently fenced-in former Subic Naval Base and such other areas that may be identified, fenced, secured or declared as additional secured area by the SBMA.”

But since the planned expansion area in Olongapo was not yet fenced, Arreza said Olongapo-based investments could not yet avail of duty-free privileges.

“Our main concern is merchandise control. That is why we’re initially thinking of giving incentives on sales tax and the 5-percent gross income tax,” said Arreza.

He also said under the planned set-up, businesses wanting to avail of the perks must be endorsed by the Olongapo City government to the SBMA.

The system will be similar to that employed by the Philippine Economic Zone Authority, which registers and grants perks to investors in privately-owned economic zones.

SBMA offers tax- and duty-free importation, exemption from all local and national taxes, 5-percent corporate tax on gross income and unrestricted entry of foreign investments. By Elaine Ramos Alanguilan - Manila Standard Today

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