Investment pledges for new projects in economic zones fell by more than 30 percent in May, as the Philippine Economic Zone Authority (Peza) sought to provide some relief to its existing locators.
Latest available Peza data showed on Tuesday that investment pledges dropped 31.65 percent in the first five months of the year to P29.54 billion, as opposed to the P43.22 billion in the same period in 2019.
Struggling to get meaningful gains in the middle of the pandemic, the investment promotion agency has been trying to at least preserve what it has by providing assistance to Peza-registered firms.
In an online press conference on Tuesday, Peza Director General Charito Plaza said they had decided to let COVID-19 related costs be treated as a deductible expense in a project’s gross income.
These, she said, include expenses for providing temporary housing and transportation to workers, as well as paying for their testing.
This, however, applies only to companies that are eligible or are already availing themselves of the 5-percent gross income earned tax, which locators pay in lieu of local and national taxes.
Not all companies pay the GIE (gross income earned) tax. It is only after they use up four to six years of income tax holiday can they shift to the 5-percent GIE tax. —Roy Stephen C. Canivel INQ