PEZA, DOF ready perks for domestic ecozones

(The Philippine Star)
January 10, 2018 – 12:00am
http://beta.philstar.com/business/2018/01/10/1776206/peza-dof-ready-perks-domestic-ecozones

“In our next PEZA board meeting this month, hopefully, we can already approve the domestic manufacturing ecozone. This would be for the small and medium manufacturing enterprises which will be co-located in our existing ecozones for exporters,” PEZA director general Charito Plaza said.

Locators in PEZA’s economic zones are presently required to have the bulk or at least 70 percent of their production for export.

Investors have long been clamoring for the establishment of economic zones for domestic market-oriented firms, aiming to spread out manufacturing activities and support moves to attain inclusive economic growth.

“There are many advantages to this. One is to help mentor and grow the small and medium manufacturing enterprises. Second, they could become suppliers or partners of the existing exporters so they become indirect exporters. Third, we encourage the underground economy, meaning the small businesses who are not yet out in the open, about their business,” Plaza said.

Plaza said PEZA is now finalizing with the DOF the set of incentives which locators in domestic manufacturing economic zones would be entitled to.

“PEZA is recommending incentives like payment of only five percent of their gross income, but we will have a cap. We recommended 10 to 15 years. They will also enjoy other non-fiscal incentives,” Plaza said.

Plaza said recommendations on giving domestic market-oriented firms the other perks PEZA grants to export-oriented firms like tax and duty-free importation of equipment and raw materials and zero VAT rating on their local purchases, however, are “still on the table.”

“Some of these recommendations are for deliberation because DOF requested for time to make their comments,” she said.