MANILA, Philippines — The Philippine Economic Zone Authority (PEZA) prefers to have its own set of incentives under the government’s next tax reform plan amid the Department of Finance (DOF)’s move to create a single menu of incentives applicable to all investment promotion agencies (IPAs).
PEZA director general Charito Plaza said the agency would propose to expand its current incentives “to attract the basic industries, the basic crops industries, and investors who will bring development to the countryside.”
“Our proposal is, we will have new incentives packages for basic industries. Basic industries are industries that are not yet here with us, like steel,” Plaza said.
“Then another package of incentives for industries who will manufacture and process the basic crops that we are still lacking in the Philippines like rice, sugar, coffee, abaca, vegetables,” she added.
Plaza said another package of incentives PEZA seeks is for industries that will develop the countryside.
“Those who will go to rural areas to develop land and make it more productive should be incentivized,” she said.
Plaza said she is forming a PEZA technical working group to study the DOF’s proposals under the second tax reform package.
“We requested DOF to give us the whole month of March because we want to come up with our own proposals,” she said.
“On TRAIN 1, we are thankful that all the incentives of PEZA to its industries are status quo. None has been removed,” Plaza added.
For Package 2, which has already been submitted to Congress, the DOF intends to cover both rationalization of fiscal incentives and reduction of corporate income tax rates.
Plaza said she hopes PEZA’s incentives would remain untouched in the second package.
“What I suggested to Finance Undersecretary Karl Chua is to let everybody sit down and we consolidate all our ideas. I suggested to allow all IPAs to come up with our package of incentives and then we sit down together and finalize so that when we go to Congress, we are in unison and there will be no more opposition,” Plaza added.
There are currently 14 IPAs in the country, all authorized to grant tax incentives under their respective charters.
For its proposed rationalization of fiscal incentives, the DOF intends to make incentives performance-based, targeted, time-bound and transparent.
Among the reforms includes the creation of one single menu of incentives applicable to all IPAs.