The Subic Bay Metropolitan Authority (SBMA) is seriously considering to expand the granting of state incentives to projects outside of the Freeport zone to nearby areas in Olongapo City.
According to SBMA Administrator Armand Arreza, the perks may include fiscal incentives like sales tax and 5-percent gross income tax.
“We are now in the process of formulating the implementing rules,” Arreza said.
“We are working it out with Olongapo City officials so that businesses located in Olongapo would qualify for some incentives under Executive Order (EO) 675,” Arreza added, referring to the order signed by President Arroyo that expanded the area where tax- and duty-free privileges for Freeport zones would apply.
Under EO 675, the tax- and duty-free privileges within the Subic Special Economic and Free Port Zone “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.”
But Arreza said that because the planned expansion area in Olongapo is not yet fenced in, duty-free privileges cannot be applied.
“Our main concern is merchandise control,” Arreza said.
“That is why we’re initially thinking of giving incentives on sales tax and the 5-percent gross income tax.”
He added that 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 said.
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 5 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.
The SBMA official revealed the planned incentives for Olongapo companies after calling for the further development of the Subic-Clark growth corridor and pushing for the creation of additional industrial estates to sustain Central Luzon’s economic momentum.
Arreza said earlier that if the areas between Subic and Clark were developed into industrial estates, the SBMA could push through with its expansion program that is projected to create 150,000 new jobs.
He also said that the SBMA’s expansion plan also considers the development of areas in the nearby communities of Olongapo City, Subic town in Zambales, and Morong, Hermosa and Dinalupihan in Bataan. –Ayen Infante, Daily Tribune
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