PEZA proposes VAT exemption for ecozones


THE Philippine Economic Zone Authority (PEZA) urged government to exempt economic zones and industries from the value-added tax (VAT), PEZA Director General Charito Plaza said.

“The entire tax reform is okay, except that we will ask for an exemption from VAT coverage for economic zones and our industries because this is one big attraction of investors, why they’re investing with us, because of the exemption from VAT,” Plaza said early this week.

Plaza noted the PEZA will be affected by the new tax reform bill once it is signed into law, because of the VAT imposition.

“This is one of the incentives that our investors are enjoying, the zero VAT. So, we will submit our position paper that, at least, ecozones and industries will be exempted from this provision of the proposed tax reform – that the VAT exemption for ecozones and industries should stay,” she added.

Unlike most government-owned and -controlled corporations, PEZA does not get its budget from the national government, but pays its annual 30 percent corporate income tax and VAT.

Ironically, this means that while PEZA gives corporate income tax incentives and VAT zero rate to its locator enterprises, it gets no tax incentives at all, Plaza said.

“And over the past 22 years, PEZA has remitted a total of P17.651 billion to the national government representing taxes, 50 percent annual dividends and payments of previous loans incurred by then EPZA,” she added.

Those numbers show how competitive and attractive it is for the economic zones are to investors our, as a reflection of the effective partnership with the private sector.


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