News update The Freeport Area of Bataan offers incentives, tax cuts to investors

MARIVELES, Bataan - The Freeport Area of Bataan (FAB) will offer a package of incentives and tax holidays to investors in the newly-created Freeport and Economic Special Zone, a FAB official revealed Thursday.

Lawyer Deo Custodio, chairman and administrator of FAB, told the Manila Bulletin that the incentive package is aimed at enticing new investors to establish the FAB as a major gateway for trade and industry.

Among the special privileges to be afforded investors are tax and duty-free importations of raw materials, capital and equipment to registered enterprises located inside FAB.

"As a holder of investor's visa, an alien shall be entitled to reside in the Philippines while his investment subsists. For this purpose, he should submit an annual report, in the form duly prescribed for the purpose, to prove that he has maintained his investment in the country, should said alien withdraw his investments from the Philippines, then the investor's visa issued him shall automatically expire."

However, under Republic Act 9728 converting the Bataan Special Economic Zone into the FAB, exportation or removal of goods from the territory of the FAB to the other parts of the country shall be subject to customs duties and taxes, Custodio clarified.

It states that: "No taxes, local and national shall be imposed on business establishments operating within the FAB. In lieu thereof, said business establishments shall pay a five percent (5%) final tax on their gross income earned in the following percentages: One percent (1%) to the National Government; one percent(1%) to the Province of Bataan; one percent (1%) to the treasurer's office of the Municipality of Mariveles; and two percent (2%) to the Authority of the Freeport of Area of Bataan."

Enterprises registered with the FAB may enjoy the income tax holiday (ITH) or the net operating loss carry over (NOLCO) granted by the authority prior to the availment of the five percent (5%) gross income earned (GIE).

Custodio assured that all these incentives are allowed under the Tariff and Customs Code of the Philippines, as amended, and the National Internal Revenue Code (NIRC) of 1997, as amended.

"The AFAB shall be responsible for the administration and implementation of the incentives granted to its respective registered enterprises. Among others, it shall adopt and implement systems and procedures affecting trade and customs policies.