Peza cheers new rules on zero VAT incentives
Philippine Economic Zone Authority
MANILA -The Philippine Economic Zone Authority (Peza) has cheered the decision from the Bureau of Internal Revenue (BIR) to clarify the rules on the zero-VAT (value-added tax) incentives for registered businesses, saying that move will boost investor confidence in the country.
Peza Director General Tereso Panga lauded President Marcos for prompting the concerned agencies to correct the previous administration’s issuances that limited the grant of incentives to qualified projects and activities of registered business enterprises.
“The revised BIR revenue regulations give justice to the real intent and spirit of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law, which is to incentivize qualified investments and to streamline and clarify the guidelines on the availment of VAT zero rating or exemption incentives by registered business enterprises,” he said in a statement over the weekend.
“With the restoration of our ecozone export-oriented locators’ incentives, including VAT zero rating or exemption on goods and services that are directly and exclusively used in their registered activity, this will improve their bottom line and capacity to reinvest in the country,” Panga added.
Improvement to tax law
The Peza chief said this move will also attract new investors to take advantage of the incentives and benefits offered by the CREATE law.
“As the locators are spared from the VAT refund process, it will benefit [them] as well their local suppliers who are no longer required to apply with the BIR for the VAT zero rating of their transactions,” said Panga.
“The certification issued by IPAs (investment promotion agencies) shall be the basis for availing of the VAT zero rating incentive. This will strengthen the role of IPAs in investment facilitation and exercise of regulatory functions over registered business enterprises,” he said further.
The Peza official also noted the provision of a negative list in the issuance, which limits to six items the goods and services that are subject to VAT for registered enterprises. INQ
