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Ecozone logistics service enterprises (ELSE) qualify for incentives under the 2022 Strategic Investment Priority Plan (SIPP)
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But Board of Investments approval is needed first before ELSEs are included in SIPP
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The Philippine Economic Zone Authority Board deferred approval of ELSEs’ inclusion in the SIPP in an August 26 meeting although it agreed to approve their inclusion ad referendum once they receive BOI clarification
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New ELSEs to be registered by PEZA under the CREATE Law may also receive tax- and duty-free importation and zero value-added tax rating on local purchases
Ecozone logistics service enterprises (ELSE) may soon be eligible for incentives under the 2022 Strategic Investment Priority Plan (SIPP), according to the Philippine Economic Zone Authority (PEZA).
But first, the Board of Investment needs to confirm that “ELSEs are eligible for registration with incentive,” PEZA officer-in-charge and deputy director general for policy and planning Tereso Panga told PortCalls.
He said PEZA has already registered ELSEs “as this activity is included in the SIPP Tier 1 under support to export activities.”
ELSEs are traders supplying production-related raw materials and equipment that cater exclusively to requirements of ecozone locators.
Third-party logistics service providers are not qualified for ELSE registration, Panga noted.
The SIPP, whose creation is provided for under Republic Act No. 11534, or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, will replace the current Investment Priorities Plan, a list of investment priority sectors or preferred investment areas that may be given investment incentives.
Panga earlier said the PEZA Board deferred approval of the inclusion of ELSEs in the SIPP in a meeting on August 26 but agreed to grant approval ad referendum once they receive clarification from the Department of Finance (DOF) and BOI.
He said once PEZA receives confirmation from BOI, it will submit to the PEZA Board a memo on the inclusion of ELSEs via ad referendum approval.
Panga said under the old regime, PEZA grants ELSEs tax- and duty-free importation and zero value-added tax rating on local purchases. PEZA is pushing for the same incentives for new ELSEs under the CREATE Law.
Logistics and export activities are included under Tier 1 of the 2022 SIPP, which is embodied in Memorandum Order No. 61 series of 2022 signed on May 24, 2022. Export activities, meanwhile, include activities in support of exporters.
BOI, which spearheaded the crafting of the SIPP, has been conducting roadshows on the SIPP to encourage investments. – Roumina Pablo
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