The Philippine Export Zone Authority has rallied local government units in Negros Oriental to prepare for the expansion of IT companies in Metro Manila, which could follow the lead of call centers and other IT companies who have invested in Negros Oriental. {{more}}
Elmer San Pascual, PEZA promotions manager, have been PEZA to LGUs: Prepare for expansion of IT companies in Metro Manila. “We see double digit growth for these companies,” San Pascual said.
The Philippines ranks second to India worldwide in the call center industry and is the leading provider for non-voice ICT services such as editing and medical transcription.
Negros Oriental has several ICT companies, like Teletech, SPI, PLDT e-Ventus, Qualfon, Entheos IT, and some smaller companies.
The PEZA grants a four- year tax exempt status for ICT companies which move to PEZA zones. A PEZA zone, San Pascual said, can be any building anywhere in the country which is endorsed by the local government unit, accredited by the PEZA and is proclaimed a PEZA zone by the President of the Philippines.
Because of the tax-exempt status of PEZA companies, local government units will simply postpone their income as they will start earning only on the fifth year.
After the expiration of the income tax holiday, these businesses will pay a five percent tax from their gross income to the government. Of this tax, three percent will go to the national government through the Bureau of Internal Revenue while two percent will go to the local government unit, to be paid to the municipal or city treasurer.
“This is big money,” San Pascual said.
Local government units, however, seemed reluctant to bite at the PEZA enticement as they would lose control over the PEZA business operations. PEZA firms do not need to get a Mayor’s Permit to operate their business because they are covered by the PEZA franchise.
Dumaguete City Administrator William Ablong said LGUs must have a say in regulating businesses inside the PEZA zone. “If they do not register with the local government, they have no name in our books. They may not be able to avail of the City’s services such as garbage collection, health services and police protection.”
San Pascual said that while the law says that all PEZA —registered firms are exempt from all fees and permits required by the LGU, the PEZA and the LGU may enter into a memorandum of agreement to identify nominal fees which the PEZA will pay for garbage collection and other services. This MOA will be patterned after an agreement the PEZA had entered into with the City of Makati.
Engr. Greg Uymatiao, Jr., the chairman of the Negros Oriental Business Development Foundation, said that while local government units are not earning taxes from the operation of call centers in the PEZA zones in Dumaguete, it is already good that these companies support about 3,000 employees and their families. “This translates to about 15,000 people in Dumaguete who are supported by these call centers,” Uymatiao said.
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