Problems relating to Trade and Investment on The Philippines
6. Reduction and elimination of preferential policies for foreign capital |
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Issue |
Issue details |
Requests |
Reference |
| (1) Land Tax Levied within Subic Freeport Zone | - By right, Government of the Philippines (GOP) has developed and expanded Subic Freeport zone (SFZ) as special economic zone (SEZ), free from all taxes and dues, save for payment of 5% corporate income tax, and has attracted foreign investment, after its conversion from the U.S. military reservation. However, since October 2011, Subic Bay Metropolitan Authority (SBMA) has compelled, upon enterprises entering SFZ, payment of 2 to 4 peso per cubic meter for common service fee (CSF), ostensibly comprising the road overhauls within SFZ, and forestry maintenance. In effect, however, it is apparent that CFS is collected to cover the loss from SMBA's failure in conversion of the Subic Airport into a container yard. It amounts to nothing but property tax. Japanese affiliated enterprises, leading the on-going court proceedings on this issue. | - Business Environment Committee (BEC) of Japanese Chamber of Commerce and Industry of the Philippines Inc. (JCCIP), at member firm's request has takes up this issue with competent authority of GOP. However, no development has taken place in the past few months. - It is requested that JCCIP also extends its helping hand toward solution of this problem. |
- Republic Act No. 7227 & R.A. No. 9400, Amending R.A. No. 7227: "The provisions of existing laws, rules and regulations to the contrary notwithstanding, no taxes, local and national, shall be imposed within the Subic Special Economic Zone." |
| (2) Prospect of Dwindling Tax Incentive Measures | - The discussion has revived over the review of tax incentive measures on enterprises in PEZA (Philippines economic zones) and the newly entering enterprises, focused on repeal of tax exemption period and extension of tax reduction period. | - It is requested that GOP holds on and maintains the status quo of the existing scheme. | |
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