SC cancels duty-free perks of Subic, Clark

The Supreme Court (SC) has effectively nullified duty-free removal of imported goods regardless of quantity from Subic, Clark and other special economic zones in the country.

In a July 29 en banc ruling, the SC ruled as invalid certain provisions in EO 97-A that allowed tax and duty-free removal of goods to certain individuals, even in a limited amount ($100 per month for residents and $200 per year for non-residents) from the secured areas of the Subic Special Economic Zone for being violative of Section 12 of RA 7227.

RA 7227 expressly provides that the "exportation or removal of goods from the territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject to customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines."

In the same SC decision, it also nullified the duty-free removal of goods from Clark by declaring "null and void Section 5 of Executive Order 80 and Section 4 of the Bases Conversion Development Authority (BCDA) Board Resolution No. 93-05-034 for being an invalid exercise of executive legislation."

In view of the SC decision, no imported goods regardless of quantity can be brought out of Subic, Clark and other economic zones without paying the proper taxes and duties.

The SC decision was lauded by the Federation of Philippine Industries, Coconut Oil Refiners Association, Philippine Association of Meat Processors, Inc., Federation of Free Farmers and Bukluran ng Manggagawang Pilipino which had originally filed the petition questioning the duty-free shopping and removal of goods from Subic and Clark.

According to Jesus L. Arranza, the landmark SC decision "will level the playing field between local manufacturers and importers located in special economic zones.