Peza charter needs to be amended – Plaza
THE Philippine Economic Zone Authority (PEZA) wants the law that created it, Republic Act 7916 or the Special Economic Zone Act of 1995, amended so it could grant more incentives to investors, its chief said on Wednesday.
In an interview, PEZA Director General Charito Plaza said the 23-year-old law has “so many weaknesses” and proposed placing the agency under the Office of the President (OP).
“We want to [give the agency a clear personality]by really making it a GOCC (government-owned and -controlled corporation) under the OP,” she added.
The proposed amendment would include retaining the incentives being enjoyed by investors inside economic zones, and suggesting or recommending additional ones to such industries as steel and agriculture.
“We will propose” giving the power of granting incentives to the PEZA Board, instead of “the proposed FIRB (Fiscal Incentives Regulatory Board) under Train 2,” she said.
Train 2 refers to the second package of the government’s Comprehensive Tax Reform Program (CTRP). It proposes to gradually lower corporate income tax to 25 percent from 30 percent, while modifying tax incentives for companies.
Train stands for Tax Reform for Acceleration and Inclusion, the name of the program’s first package that was enacted last December and implemented on January 1.
Placing the agency under the FIRB, as proposed in Train 2, is “redundant,” as “almost all agencies, which has participation in PEZA’s registrable industry, are already members of [its]board,” Plaza said.
“There is no need for another body” to supervise the agency, she added.
The more different government agencies interfere, the more investors will be discouraged, the PEZA chief warned.
Plaza also said subsidies—which her agency can recommend, but only the President can approve—may be granted to firms with investments reaching a billion dollars.
Such subsidies may include lowered power or land costs, she added.
Putting specific incentives under RA 7916 would ensure that these would not be changed, according to her.
“The present PEZA law does not provide for specific investments that PEZA can provide, so it is using the incentives provided in other laws,” Plaza said.
“The (5 percent) gross income earned (GIE) is part of the Peza law, but all other incentives [are]borrowed from other laws,” she added.
“In the proposed new law, we will specifically provide the incentives, so that there will be stability, and there will be no change.”
PEZA will also include in the proposed amendment the information technology (IT) sector as one that can be registered with the agency, Plaza said, explaining that the the industry was yet to be active when RA 6916 was passed.
The agency is finalizing the proposal and aims to submit it to Congress before or immediately after the President’s third State of the Nation Address (SONA) on July 23.
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