Foreign Equity and Professionals NewsLegislation NewsPart 4 News: General Business Environment

PEZA seeking to insert grandfather exemptions in CITIRA legislation

The Philippine Economic Zone Authority (PEZA) said it hopes to grandfather more locators and impose a 15-year transition period in its proposals to modify the bill seeking to rationalize investor incentives.

PEZA in a statement Thursday laid out its proposed amendments to the Corporate Income Tax and Incentives Rationalization Act (CITIRA).

CITIRA aims to cut corporate tax incentives from 30% to 20% in 10 years and rationalize fiscal incentives, which PEZA has warned will deter investment and drive current locators away.

PEZA had earlier sought exemption for its locators from the CITIRA bill, fearing the exit of foreign investors. But it agreed to soften its position in October after a meeting with the trade secretary, and instead agreed to propose refinements to the bill.

PEZA Director General Charito B. Plaza said that the proposed changes are based on consultations with its exporters and information technology enterprises, ecozone developers, and industry partners.

“While the agency supports the goals of the CITIRA bill, PEZA aims to address the possible exits of foreign investors from the country’s ecozones towards other countries as this will result in massive job losses for thousands of Filipinos, thus affecting peace and prosperity,” she said.

PEZA consulted with the Philippine Ecozones Association (PHILEA), Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI), Information Technology and Business Process Association of the Philippines (IBPAP), Confederation of Wearable Exports of the Philippines (CONWEP), and various foreign business chambers.

PEZA said the “principles” guiding its proposals are to eliminate the risk of massive unemployment, minimize red tape, remove constitutional infirmities, prevent the Philippines from becoming uncompetitive, and avoid a backlash from exporters.

It said its proposals remove complicated items, controversy, and “shotgun approaches” to regulating investors.

changes refinements would save P21 billion intended for the structural adjustment fund, as well as “save the reputation of the Philippines and its Investments Promotion Agencies (IPAs) as honorable members of the global business community.” — Jenina P. Ibañez