The Philippine Economic Zone Authority expressed confidence the government will retain the tax incentives given to economic zone locators.
“We’ve hurdled Train [Tax Reform for Acceleration and Inclusion] Act 1, but there is part 2. Everything is hanging,” said Peza director-general Charito Plaza.
Peza deputy director-general Mary Harriet Abordo said the agency was protected by law by virtue of a provision in the Peza Act that states that ecozones should be operated and managed as a separate customs territory.
“There’s already a Supreme Court ruling that says that separate customs territory is in effect foreign soil. So in effect, Peza is foreign soil by legal fiction. Since VAT [value added tax] follows the principle of cross border doctrine, so any sale from a locator’s supplier to an economic zone is considered to be cross border and is therefore VAT zero rated,” she said.
She said the tax reform law did not repeal Section 8 of Peza law.
Plaza said the agency was prepared to protect its mandate if a differing interpretation was given on Peza incentives.
