COTABATO CITY—An economic upswing in the Bangsamoro region is expected following the announcement of the Fiscal Incentive Review Board (FIRB) on January 24 that the Bangsamoro Economic Zone Authority (BEZA) is now an Investment Promotion Agency (IPA).
According to BEZA Executive Director Atty. Sukarno Abas, this milestone will enable the agency to fully operationalize its authority to grant fiscal and non-fiscal incentives to investors and enterprises willing to set up or establish their businesses in the Bangsamoro Autonomous Region in Muslim Mindanao’s (BARMM) economic zones.
“This will entice potential investors to put up businesses that will expand economic opportunities in the region, particularly the industry and services that generate more jobs, increase productivity, and generally improve the quality of the living conditions of the Bangsamoro people,” Abas said.
IPAs are government agencies whose goal is to create awareness of the current investment opportunities in the country to attract investors with the means to provide job opportunities and increased productivity in the economy.
The FIRB agreed to certify BEZA as an IPA, giving it the authority to grant incentives under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which provides tax relief measures for businesses.
Enterprises registered to BEZA can avail the following tax incentives:
- Export enterprises may be granted an Income Tax Holiday (ITH) of four (4) to seven (7) years depending on the location and industry priorities
- After ITH, export enterprises can avail a 5% Special Corporate Income Tax OR Enhanced Deductions for ten years.
- Tax-and-duty-free importation of capital equipment, raw materials, spare parts, or accessories.
- VAT exemption on importation and VAT zero-rating on local purchases for goods and services directly or exclusively used in the registered project or activity of export enterprise for the period of registration of the said project or activity.
- Domestic sales allowance of up to 30% of total sales.
- Exemption from payment of local government taxes and fees for the duration of the period of availment of the 5% SCIT incentive.
Republic Act 11054 or the Bangsamoro Organic Law (BOL) grants the Bangsamoro Government the authority to establish economic zones, industrial estates, and free ports within the Bangsamoro region, including the creation of BEZA. This authority mirrors the powers vested in the Philippine Economic Zone Authority (PEZA).
“This office is mandated to operate, administer, manage, and develop the economic zones in the region. It is also responsible for registering, regulating, and supervising the enterprises in the ecozone,” Abas added.
An economic zone or ecozone is a selected area or district within a country in which businesses and investors can benefit from special government policies such as the granting of incentives.
These designated areas, chosen for their existing development or potential for growth into agro-industrial, tourism, information technology parks, estates, recreational, commercial, banking, investment, and financial centers, operate as separate customs territories and are administratively independent from the control of Local Government Units (LGUs).
Abas stressed the significant impact of the economic zone on several comparative advantages that can be utilized to improve the current state of the region, its government, and its people.
Moreover, BEZA is seeking to establish more economic zones, especially for Halal hubs in the region, which is composed of six provinces and three cities. [READ RELATED STORY: BARMM strengthens initiatives to establish more ecozones, Halal hubs]
Abas ensured the continuity of best practices in performing the agency’s mandates.
“Even before becoming an IPA, BEZA has been working out the institutionalization of the regulations and processes related to assisting investors who opt to establish businesses in the region. The agency ensures that the procedure will be rationalized according to the guidelines set forth by the BEZA Board of Directors,” he stressed.
These efforts are aligned with the Bangsamoro Government’s second goal which aims to promote an equitable, competitive, and robust economy, ultimately advancing the region’s overarching goal of becoming an “empowered, cohesive, and progressive Bangsamoro.” (Johaira Sahidala/BIO)