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Friday, March 29, 2024

Revisiting CREATE law urged for better perks

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THE Philippine Economic Zone Authority (PEZA) said there’s a need to revisit the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law to make fiscal incentives “more competitive.”

“We know that this is all a concern of the industry, particularly on the [Bureau of Internal Revenue Revenue Memorandum Circulars] BIR RMCs which have been limiting the grant of incentives to our locators,” PEZA Officer-in-Charge Tereso O. Panga said at PEZA’s 2022 Investors’ Recognition Day last Friday.

Panga said Trade Secretary Alfredo E. Pascual, who is also PEZA’s Chairman of the Board, will bring this up in the upcoming meeting with the Fiscal Incentives Review Board (FIRB).

“We are discussing this with the BIR and we hope we will be sustained soon, that all these inconsistencies will be resolved; that will now allow for full retention of incentives particularly on the availment of zero-vat by our locators,” the PEZA chief added.

The current head of PEZA revealed that they have been getting a lot of complaints from locators, with some filing cases with the Court of Tax Appeals (CTA) already.

“We’re forcing now the issue… we have the secretary now working on this. He has discussed this with the President. On one side, we’re also trying to get a favorable [Department of Justice] DOJ opinion,” said Panga.

Last week, the PEZA chief said some locators have raised concerns, noting that they want the government to have uniform, simple and transparent guidelines for the conduct, particularly on tax assessment. Panga said there’s a need to resolve issues of locators related to the BIR’s rules on zero value-added tax (VAT) rating incentive.

“If BIR can be more proactive in assisting the locators in terms of compliance with documentary/audit requirements. This is where the government can enhance the regulatory relief mechanism so locators can bring up their concerns with higher authorities other than the BIR and the [Court of Tax Appeals] CTA,” Panga told the BusinessMirror.

Apart from ironing out locators’ concerns, Panga also noted the need to amend the PEZA law, a 27 year-old law, particularly to institutionalize the work-from-home policy and the “rationalization” of requirements for ecozone proclamation.

We’re saying there’s a need to institutionalize WFH policy although this is already the direction so that both BOI and PEZA will be put on an equal footing, both can avail of WFH with incentives,” Panga said.

Meanwhile, the PEZA chief also said, “We want rationalization of requirements for our ecozone proclamation because it’s only PEZA that goes through the presidential proclamation process.”

“In the case of [Authority of the Freeport Area of Bataan] AFAB, [Tourism Infrastructure and Enterprise Zone Authority] TIEZA, they can designate areas as ecozones without having to go through presidential proclamation,” Panga added.

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