Development Strategy of the ECOZONE.
SEC. 21. Development Strategy of the ECOZONE. — The strategy and priority of development of each ECOZONE established pursuant to this Act shall be formulated by the PEZA, in coordination with the Department of Trade and Industry and the National Economic and Development Authority; Provided, That such development strategy is consistent with the priorities of the national government as outlined in the medium-term Philippine development plan.
It shall be the policy of the government and the PEZA to encourage and provide incentives and facilitate private sector participation in the construction and operation of public utilities and infrastructure in the ECOZONE, using any of the schemes allowed in Republic Act No. 6957 (the build-operate-transfer law).
Survey of Resources.
SEC. 22. Survey of Resources. — The PEZA shall, in coordination with appropriate authorities and neighboring cities and municipalities, immediately conduct a survey of the physical, natural assets and potentialities of the ECOZONE areas under its jurisdiction.
Fiscal Incentives.
SEC. 23. Fiscal Incentives. — Business establishments operating within the ECOZONES shall be entitled to the fiscal incentives as provided for under Presidential Decree No. 66, the law creating the Export Processing Zone Authority, or those provided under Book VI of Executive Order No. 226, otherwise known as the Omnibus Investment Code of 1987.
Furthermore, tax credits for exporters using local materials as inputs shall enjoy the same benefits provided for in the Export Development Act of 1994.
Exemption from Taxes Under the National Internal Revenue Code.
SEC. 24. Exemption from Taxes Under the National Internal Revenue Code. — Any provision of existing laws, rules and regulations to the contrary notwithstanding, no taxes, local and national, shall be imposed on business establishments operating within the ECOZONE. In lieu of paying taxes, five percent (5%) of the gross income earned by all businesses and enterprises within the ECOZONE shall be remitted to the national government. This five percent (5%) shall be shared and distributed as follows:
Three percent (3%) to the national government;
One percent (1%) to the local government units affected by the declaration of the ECOZONE in proportion to their population, land area, and equal sharing factors; and
One percent (1%) for the establishment of a development fund to be utilized for the development of municipalities outside and contiguous to each ECOZONE: Provided, however, That the respective share of the affected local government units shall be determined on the basis of the following formula:
Population - fifty percent (50%);
Land area - twenty-five percent (25%); and
Equal sharing - twenty-five percent (25%)
Applicable National Taxes.
SEC. 25. Applicable National Taxes. — All income derived by persons and all service establishments in the ECOZONE shall be subject to taxes under the National Internal Revenue Code.
Domestic Sales.
SEC. 26. Domestic Sales. — Goods manufactured by an ECOZONE enterprise shall be made available for immediate retail sales in the domestic market, subject to payment of corresponding taxes on the raw materials and other regulations that may be adopted by the Board of the PEZA.
However, in order to protect the domestic industry, there shall be a negative list of industries that will be drawn up by the PEZA. Enterprises engaged in the industries included in the negative list shall not be allowed to sell their products locally. Said negative list shall be regularly updated by the PEZA.
The PEZA, in coordination with the Department of Trade and Industry and the Bureau of Customs, shall jointly issue the necessary implementing rules and guidelines for the effective implementation of this section.
Applicability of Banking Laws and Regulations.
SEC. 27. Applicability of Banking Laws and Regulations. — Existing banking laws and Bangko Sentral ng Pilipinas (BSP) rules add regulations shall apply to banks and financial institutions to be established in the ECOZONE and to other ECOZONE-registered enterprises. Among other pertinent regulations, these include those governing foreign exchange and other current account transactions (trade and non-trade) , local and foreign borrowings, foreign investments, establishment and operation of local and foreign banks, foreign currency deposit units, offshore banking units and other financial institutions under the supervision of the BSP .
After Tax Profits.
SEC. 28. After Tax Profits. — Without prior Bangko Sentral approval, after tax profits and other earnings of foreign investments in enterprises in the ECOZONE may be remitted outward in the equivalent foreign exchange through any of the banks licensed by the Bangko Sentral ng Pilipinas in the ECOZONE: Provided, however, that such foreign investments in said enterprises have been previously registered with the Bangko Sentral.
Eminent Domain.
SEC. 29. Eminent Domain. — The areas comprising an ECOZONE may be expanded or reduced when necessary. For this purpose, the government shall have the power to acquire, either by purchase, negotiation or condemnation proceedings, any private lands within or adjacent to the ECOZONE for:
Consolidation of lands for zone development purposes;
Acquisition of right of way to the ECOZONE; and
The protection of watershed areas and natural assets valuable to the prosperity of the ECOZONE.
Leases of Lands and Buildings.
SEC. 30. Leases of Lands and Buildings. — Lands and buildings in each ECOZONE may be leased to foreign investors for a period not exceeding fifty (50) years, renewable once for a period of not more than twenty-five (25) years, as provided for under Republic Act No. 7652, otherwise known as the Investors' Lease Act. The leasehold right acquired under long-term contracts may be sold, transferred or assigned, subject to the conditions set forth under Republic Act No. 7652.
Land Conversion.
SEC. 31. Land Conversion. — Agricultural lands may be converted for residential, commercial, industrial and other non-agricultural purposes, subject to the conditions set forth under Republic Act No. 6657 and other existing laws.
Shipping and Shipping Register.
SEC. 32. Shipping and Shipping Register. — Private shipping and related business including private container terminals may operate freely in the ECOZONE, subject only to such minimum reasonable regulations of local application which the PEZA may prescribe.
The PEZA shall, in coordination with the Department of Transportation and Communications, maintain a shipping register for each ECOZONE as a business register of convenience for ocean-going vessels and issue related certification.
Ships of all sizes, descriptions and nationalities shall enjoy access to the ports of the ECOZONE, subject only to such reasonable requirement as may be prescribed by the PEZA in coordination with the appropriate agencies of the national government.
Protection of Environment.
SEC. 33. Protection of Environment. — The PEZA, in coordination with the appropriate agencies, shall take concrete and appropriate steps and enact the proper measures for the protection of the local environment.
Termination of Business.
SEC. 34. Termination of Business. — Investors in the ECOZONE who desire to terminate business or operations shall comply with such requirements and procedures which the PEZA shall set, particularly those relating to the clearing of debts. The assets of the closed enterprises can be transferred and the funds can be remitted out of the ECOZONE subject to the rules, guidelines and procedures prescribed jointly by the Bangko Sentral ng Pilipinas, the Department of Finance and the PEZA.
Registration of Business Enterprises.
SEC. 35. Registration of Business Enterprises. — Business enterprises within a designated ECOZONE shall register with the PEZA to avail of all incentives and benefits provided for in this Act.
One Stop Shop Center.
SEC. 36. One Stop Shop Center. — The PEZA shall establish a one stop shop center for the purpose of facilitating the registration of new enterprises in the ECOZONE. Thus, all appropriate government agencies that are involved in registering, licensing or issuing permits to investors shall assign their representatives to the ECOZONE to attend to investors' requirements.
CHAPTER IVINDUSTRIAL HARMONY IN THE ECOZONES
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
