By Bebot Sison Jr. Updated May 25, 2009 12:00 AM [ philstar.com ]
OLONGAPO CITY, Philippines — Officials of this city yesterday welcomed the initiative of Subic Bay Freeport authorities to grant incentives to investors willing to locate outside of the fenced-in area of the free port, particularly in this city.
Olongapo Mayor James “Bong” Gordon Jr. described the planned incentives package as “a big boost to Olongapo” as the city undertakes its program to improve the local economy and provide sustainable income opportunities to residents, said senior executive sssistant for public relations Mike Pusing.
“Of course, we welcome this plan by the Subic Bay Metropolitan Authority (SBMA),” Pusing told The STAR in an interview. “This is good news for us,” he added.
Earlier, the SBMA announced that it is working out a scheme whereby qualified investments based in Olongapo City may receive some incentives enjoyed by companies registered in the Subic Bay Freeport.
According to SBMA administrator/chief executive officer Armand Arreza, the perks may include fiscal incentives like sales tax and five-percent gross income tax.
Arreza said his agency is now coordinating with Olongapo officials in formulating the implementing rules that would allow businesses located in Olongapo to qualify for some incentives under Executive Order 675, which expanded the area where tax- and duty-free privileges for free port zones would apply.
Under EO 675, the tax- and duty-free privileges within the Subic Special Economic and Free Port Zone (SSEFPZ) “shall apply within the secured area consisting of the presently fenced-in former Subic Naval Base and such other areas that may be identified, fenced, secured or declared as additional secured area by the SBMA.”
However, Arreza said that because the planned expansion area in Olongapo is not yet fenced in, duty-free privileges cannot be applied due to concerns on merchandise control.
Arreza said under the planned set-up, businesses wanting to avail of the perks would have to be endorsed by the Olongapo city government to the SBMA.
The system would be similar to that employed by the Philippine Economic Zone Authority (PEZA) which registers and grants perks to investors in privately-owned economic zones, Arreza added.
As of now, among the incentives the SBMA offers to investors registering in the Subic Bay Freeport are tax- and duty-free importation; exemption from all local and national taxes, with only a five percent corporate tax on gross income; unrestricted entry of foreign investments; no foreign exchange control; visas for foreign nationals; and expanded allowable deduction and higher percentage of income allowable from sources within the Customs territory for regional enterprises.