Support industries join call for competitive incentives

    Gearing for more locators. One company that continues to expand its industrial estate is West Cebu Industrial Park of the Aboitiz Group- Tsuneishi Group.

    Support industries to exporters in economic zones have joined the clamor for a more competitive package of perks in the pending Corporate Recovery and Tax Incentives for Enterprises Act (CREATE).

    Chito Zaldarriaga, president of the Philippine Ecozones Association (Philea) fears the reduction of incentives would lead to mass exodus of companies to other countries and, at the very least, freeze all of their expansion plans.

    “If these guys leave, we will be stuck with inventory of land,” said Zaldarriaga in a press conference earlier this week.

    Philea is composed of 30 major developers operating in more than 20 ecozones and supplies facilities to manufacturers and service exporters.

    Zaldarriaga said tax incentives played a big role to developers in heeding calls of government 25 years ago for the establishment of industrial estates to attract investments.

    But the long gestating nature of the industry which is 10 to 15 years means these investors have yet to fully recover their investments.

    “The reduction of the corporate income tax (CIT) rate will be a welcome change but to tamper with what has been working for exporters employing (thousands of workers), is very dangerous,” Zaldarriaga said.

    Mimi Malvar of Philippine Association of Multinational Companies Regional Headquarters Inc. (PAMURI) said the group appeals to government to give regional operating headquarters (ROHQ) the same treatment as other existing industries which were granted four years transition in their incentives.

    Malvar said ROHQs stand to lose the preferential rate of 10 percent CIT when the rate shifts to 25 percent under CREATE.

    This will make the Philippines less competitive against countries which offer much lower tax rates like Thailand at 3 to 8 and Malaysia, 5 to 10 percent, she added.

    PAMURI, composed of 330 big companies many of which are in the Fortune 500, employ 25,000 in high-paying professional jobs offering back office services to affiliates worldwide.