CEBU, Philippines – To uphold the spirit of justice and equity, Cebu second district Rep. Pablo Garcia moves for the allocation of a 1.5-percent share to provinces identified as economic zones, or “ecozones”, from the gross income of business enterprises operating therein.
While the city or municipality where a business enterprise is located in an ecozone is entitled to a two-percent share under the existing law, the province where this city or municipality belongs does not get any share from the business firms’ income, laments Garcia.
“It must be realized that this municipality or city is part of the territorial boundaries of the province identified as the ecozone. Most of the employees in the ecozone come from the municipalities and cities of the province,” Garcia said.
“…justice and equity dictate that the province duly identified as an ecozone should also be included as among the recipients of the benefits extended to the local government units stated in Section 24 of Republic Act 7916 or the Special Economic Zone Act of 1995,” he added.
Further, he said that the granting of income share to an ecozone province is in consonance with Section 18 of the Local Government Code which provides that the “LGUs shall have the power and authority to create their own sources of revenue and to levy taxes, fees and charges which shall accrue exclusively for the use and disposition and which shall be retained by them.”
According to Garcia, the same section of the local government code provides that ecozone provinces shall have an equitable share in the proceeds from the utilization and development of the national wealth and resources within their respective territorial jurisdictions including sharing the same with the inhabitants by way of direct benefits.
Republic Act 7916 enacted into law on February 21, 1995 encourages investors to operate business establishments within the ecozone by exempting them from the payment of local and national taxes.
But in lieu of these taxes, RA 7916 provided that three percent of the gross income earned by these business establishments shall be paid and remitted to the national government and two percent to the city or municipality where the business enterprise is located.
In his proposed House Bill 6106, the former governor of Cebu, is seeking to amend Section 24 of RA 7916 so that in lieu of imposing local and national taxes on business establishments operating within the ecozone, the five percent of the gross income of these business enterprises shall be paid and remitted as follows: 1.5 percent to the national government; two percent directly to the treasurer’s office of the municipality or city where the business enterprise is located; and 1.5 percent to the province identified as an ecozone. — Garry B. Lao/MEEV (THE FREEMAN)