THE Board of Directors of the Philippine Economic Zone Authority (Peza) has approved new rules for tourism economic zones (TEZ) where development must take place outside Metro Manila, Cebu City, Mactan Island and Boracay.
Under Peza Board Resolution No. 12-610, TEZ and its locator-enterprises in Metro Manila, Cebu City, Mactan Island, and Boracay Island shall no longer enjoy the following tax incentives enjoyed by economic zone developers and locator enterprises:
1) five percent gross income tax incentive granted to economic zone developers of TEZs;
2) Income tax holiday (ITH) and five percent gross income tax to locator enterprises of TEZs, except for tax and duty-free importation and value-added tax (VAT) zero-rating on their local purchase of capital equipment.
Existing TEZ developers/operators as well as TEZ locator enterprises in Metro Manila, Cebu City, Mactan Island and Boracay Island will continue to enjoy the tax incentives granted to them by the Peza. However, TEZ developers/operators and locator enterprises in the aforesaid areas that have not signed their registration agreements with Peza will be covered by the new policy. Henceforth, no more new TEZs will be allowed to be established in the said areas.
(Source: Punongbayan & Araullo)
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