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Vol. XXVI No. 12 March 25 - April 7, 2007 |
www.whatson-expat.com.ph |
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Clark Freeport:
Hot New Investment Haven
By Agnes M. Abrau and Jacqueline L. Ong
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Two new laws have declared the Clark Freeport Zone Area the emerging investment haven in the Philippines. Poised to become a leader in investments, already the figures on the rise of economic activities in the zone area continue to soar this year. Government officials hail the passage and implementation of the law while businessmen are upbeat on its enactment.
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| Destination: Taal Vista Hotel |
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A breathtaking view of the Taal Volcano and Lake is what attracts more and more visitors to Tagaytay each year. Taal Vista Hotel has remained a favorite place to stay for its amenities, facilities and perfect vantage point. Read more on page 2
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Even before the laws’ enactment, records show that Clark is expanding at a bewildering rate. Statistics obtained by What’s On & Expat from Clark Development Corporation’s said that the Clark Freeport Zone has had a 22 percent average annual export growth since 2000, amounting to USD1.2 billion in exports.
In what seems like a bid to win the favor of the business community, President Gloria Macapagal-Arroyo recently signed two new laws granting tax incentives, among others, to the businesses at the former Clark Special Economic Zone, now to be called the Clark Freeport Zone area (CFZ).
Republic Act 9399 or the “Act Declaring a One-Time Amnesty on Certain Tax and Duty Liabilities, Inclusive of Fees, Fines, Interests and Other Additions” provides the investors an amnesty from the duties and taxes incurred as a result of an earlier 2005 Supreme Court ruling declaring that Clark and other former US military facilities in the country are not entitled to tax and duty free privileges enjoyed by those in the Subic Freeport in Olongapo and that investors in the affected areas should pay back taxes. With the new law, the companies would be given six months to pay Php25,000 in lieu of their back taxes.
RA 9400, on the other hand, amends the RA7227 or the Bases Conversion and Development Act of 1992. Among others, it declares Clark Freeport Zone (CFZ) investors entitled to the same tax and other duty-free privileges being enjoyed by their counterparts at the Subic Freeport. The law states that the affected investor-locators pay only a five percent tax on gross income in lieu of all local and national taxes. Three percent of this would go to the national government while the rest will be distributed to the municipalities covered by CFZ.
The two newly signed laws, authored by Sen. Ralph Recto, underscore the government’s intention—to move the country forward as the next investment destination in the country. Presently, there are 389 foreign and domestic investors within the Cebu Freeport Zone, bringing in PhP24.33 billion worth of investments and employing 47,000 people mostly from neighboring provinces in Central Luzon such as Pampanga, Tarlac and Bulacan.
The newly signed law, according to officials, also upholds and honors the government commitment to grant the tax incentives to investors.
Businessmen, government officials and officials of Clark Development
Page 6
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