The statements of Philippine Economic Zone Authority (PEZA) Director-General Charito Plaza do not have the endorsement of the PEZA Board. Likewise, PEZA’s position on tax reform and the moves to propose a new PEZA law are not officially endorsed.
As Chairman of the PEZA Board, I have been hearing the side of industries and locators. In fact, we have conducted several industry consultations around the country, not only for BOI-registered companies but also including those from PEZA, Subic, Clark and other Investment Promotion Agencies (IPAs). We also met with Japanese and Korean locators in our recent visits to Japan and Korea.
In fact, PEZA companies have been coming to us for support. Moreover, it’s actually PEZA locators that we have been representing so that they can have a reasonable transition period, i.e. extending the transition period from five to ten years for existing locators.
The exemption of 90% export-oriented companies from VAT and duties reflected in both the Tax Reform for Attracting Better and High-Quality Opportunities or TRABAHO bill and the Corporate Income Tax and Incentive Rationalization Act or CITIRA bill were also adjustments made in the draft bill.
That’s why we have been working closely with the Department of Finance (DOF) and Congress on adjustments and transitions to the draft bill on tax reform. This is to soften the landing for existing locators towards a time-bound and performance-based incentive. These are very rational economic principles that I believe in and must be understood by all government policy makers. This is the way forward for a more sustainable growth path.
We are not taking away incentives but making these more efficient and effective. These incentives will be enhanced with several options and special and longer incentives for strategic and higher technology-based and value-adding sectors, or those located in least developed areas.
As long as PEZA is a government agency and a custodian of fiscal incentives, it is part of an overall tax reform that the government has adopted, which will bring benefits for the greater majority.
Hence, the PEZA Director General's claim that the DTI Secretary never showed support nor listened to the sentiments, issues and problems of industries are unfounded, totally not fair, and uncalled for.♦
Date of Release: 29 August 2019
Also posted at Press Statements (Media)