THE Philippine Economic Zone Authority (PEZA) said the proposed amendments to the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act contained in a bill approved by the House of Representatives last week addressed most of its concerns about the law.
“Almost everything that was requested by PEZA was sustained by Rep. Jose Ma. Clemente S. Salceda. So, we are happy with the version of the House,” PEZA Director General Tereso O. Panga told reporters last week.
The House approved the CREATE to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill Tuesday, which gave investment promotion agencies (IPAs) the authority to grant tax incentives.
“Basically, it will restore all powers of all IPAs — the authority to grant incentives to registered projects without having to go through another layer,” Mr. Panga said.
The CREATE MORE bill amended the CREATE law’s Section 292, or Extent of Authority to Grant Tax Incentives. Previously, IPAs were delegated authority by the Fiscal Incentives Review Board (FIRB) to grant tax incentives. The proposed amendments allowing IPAs to grant incentives as long as the registered project or activity is listed in the Strategic Investment Priority Plan.
Mr. Panga said that under the CREATE MORE bill, the FIRB, which formerly had to review all projects worth P1 billion or more, will serve as a policy-making body.
“The FIRB will be concerned with policy making. Let’s say we want to attract niche industries or emerging technologies, they can come up with new incentives packages which they will endorse to the IPAs,” he said.
The bill also allowed registered business enterprises in the information technology-business process outsourcing (IT-BPO) sector to be entitled to incentives even if they conduct business under alternative work arrangements, as long as they are compliant with the on site requirements set by the IPAs.
Mr. Panga said this amendment also covers PEZA which previously requested to allow its locators to implement work-from-home (WFH) arrangements, in order for it to have “equal footing” with the Board of Investments, which can provide incentives for IT-BPOs with up to 100% WFH arrangements.
Prior to the amendment, Section 9 of the CREATE law required a qualified registered project or activity under an IPA administering an economic zone to operate exclusively within the geographical boundaries of the zone, with non-ecozone activities not entitled to incentives.
Mr. Panga has said that by allowing PEZA to provide incentives to IT-BPO registered businesses while implementing hybrid arrangements will support IT developers putting up IT centers.
PEZA allows 70% on-site and 30% WFH activities for locators seeking to enjoy incentives. — Justine Irish D. Tabile