By Bernie Cahiles-Magkilat The Philippine Economic Zone Authority (PEZA) mulls five percent tax on gross income earned (GIE) for a period of 10-15 years for locators in the planned domestic manufacturing economic zones. PEZA Director-General Charito B. Plaza said their first Board meeting in January this year could already discuss the proposed domestic manufacturing ecozone. At present, PEZA only registers and grants juicy incentive package to export-oriented enterprises located in its various economic zones. Already, PEZA is looking at 5 percent GIE for locators in these planned domestic ecozones but for a limited period of 10-15 years. Its export-oriented ecozones now enjoy a perpetual 5 percent GIE in lieu of all other national taxes. Other non-fiscal incentives could include tax and duty-free importation of raw materials and VAT zero rated purchase of local materials. These incentives are needed to encourage small and medium manufacturing enterprises to locate in the planned domestic ecozones. “There are many advantages to this, one is of course we can help mentor and grow the small and medium enterprises,” Plaza said. In addition, these small enterprises can become suppliers or partners of the existing exporters so they become indirect exporters. The incentive package would also encourage the underground economy, meaning the small businesses which are not yet into the open about their business. For a start, PEZA has recently approved its first cooperative registered enterprise – Garments Industry Reliance.