PEZA Reiterates Appeal in Exempting Locators from Disincentives
Philippine Economic Zone Authority (PEZA) Chief Charito B. Plaza repeats her call to permit investors to keep their current fiscal incentives, exempting them from the new tax regime.
The Corporate Recovery and Tax Incentives Enterprises Act (CREATE) bill seeks to achieve faster and equitable regional development and economic opportunities in the provinces by encouraging businesses to invest in the countryside.
The tax reform seeks to reduce the corporate income tax from 30% to 25% and remove the incentives granted to exporter firms.
Plaza expressed that the reiteration of her call was due to the slump in registered investments in the economic zone as lockdown measures against the COVID-19 pandemic brought the economy near collapse.
In her speech last Friday, November 13, Plaza reported that investments from January to October declined to ₱72.64 billion, nearly a third in comparison to last year’s ₱99.32 billion. Moreover, the number of new projects in the country was reduced by nearly half, from last year’s 454 new registrants to 248 this year.
The employment situation in economic zones also suffered a decline of 2% to 1.53 million employees as of September, from the previous 1.57 million last year.
On the positive side, the resumption of operations in ecozones (economic zones) is nearing its full capacity. According to Plaza, 87% of all PEZA firms have reopened their factories during the pandemic, resulting in the return of 1.2 million employees.
Plaza added that at least 13% of all economic zones have yet to restart their plants, resulting in the joblessness of almost 279,000 workers.
