Ecozone locators raise concerns on incentives

Published May 22, 2021, 6:30 AM

by Bernie Cahiles-Magkilat

Economic zone locators and support providers have raised concerns on the continuity of their incentives as government agencies start to craft the implementing rules and regulations (IRR) of the Corporate Recovery and Tax Incentives for Enterprises (CREATE ) Law. 

An insider from one of the investment promotion agencies (IPAs) of the government said these are some gray areas in the CREATE Law that should be made clearer in the IRR. 

For instance,  ecozone enterprises have pushed for the inclusion of support to export activities and inter-zone sales among the eligible activities with incentives as these entities do not fall squarely under the definition for export and domestic enterprises. 

The official said that support to export enterprises such as ecozone developers, utilities, warehouse and environmental management facilities providers are critical to the viability of export locators.

Also being raised is for the IRR to consider the non-extension of tax and duty free importation incentive for ecozone locators upon termination of the CREATE incentives even as the separate customs territory status vested on ecozones is provided in the Philippine Economic Zone Authority (PEZA) and was not repealed by CREATE.

Ecozone enterprises under the income tax holiday regime also seek clarification on the payment of real property tax and local permits and fees. 

PEZA Director General Charito B. Plaza

On concerns of companies after the sunset period provisions of the CREATE Law, PEZA Director General Charito B. Plaza clarified that registered enterprises may apply for incentives after the sunset period. 

Plaza, however, said this will now be subject to the tier classification of CREATE and the Strategic Investment Priorities Plan. 

“The new applications and expansion of projects will already be covered by the provisions under the CREATE Law, but the PEZA Board is still awaiting the final Implementing Rules and Regulations of the legislation for the efficient execution of the changes. We’re still hoping that all those we recommended in the IRR, which aims to protect the interest of our registered business enterprises, will be considered,” added concluded.

 
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