The extension of Subic Bay Freeport’s tax and duty-free privileges to the City of Olongapo will be a key component in realizing the P3-billion development project proposed by Ayala Land, Inc. (ALI) for the city’s business district.
ALI president and CEO Antonino Aquino said that fiscal incentives like Subic’s minimal five percent gross income tax, if successfully extended to the 7,000-square meter Olongapo City Central Business District (CBD) Triangle, would set the stage for robust trade in the area.
Aquino said these tax and duty-free incentives would enable the planned tripartite committee to offer attractive deals to win the cooperation of Olongapeños, particularly the business group, which he said would be the “lifeblood of this development.”
SBMA administrator Armand Arreza assured Aquino that this prospect would be realized as soon as President Arroyo approved the implementing rules and regulations (IRR) of Executive Order No. 675, which was signed by the President on November 05, 2007 to expand the area where tax and duty-free privileges would apply.
“Once the President gives her approval, it is up to the City of Olongapo to decide what particular incentives to offer,” said Arreza.
Arreza and Aquino signed a memorandum of understanding with Olongapo Mayor James Gordon Jr. last week for the proposed Olongapo CBD Triangle project.
Per agreement, ALI will commission the master plan for the project free of charge, granted that the city government would give ALI the option to develop or purchase, subject to applicable laws, Olongapo City’s properties inside the 7,000-square meter project area.
The Ayala firm announced recently that it would invest P3 billion for a mixed-use master-planned community in the Subic Bay Freeport — a 7.5-hectare property separated from the proposed Olongapo City CBD Triangle only by a man-made channel.
Arreza, who pushed for the expansion of Subic’s free port regime to nearby communities, said the proposed project would boost Subic’s drive to gain more investments and create more livelihood opportunities for local residents.
He added that the recent moves of ALI, one of the biggest real estate developers in the country today, “clearly demonstrates what EO 675 can do to the regions between Subic and Clark.”
Arreza explained that under the EO 675, tax- and duty-free privileges within the Subic Special Economic and Free Port Zone (SSEFPZ) “shall apply within the secured area consisting of the presently fenced-in former Subic Naval Base and such other areas that may be identified, fenced, secured, or declared as additional secured area by the SBMA.”
The IRR for EO 675, a collaborative work of the SBMA and the Bureau of Customs (BOC) here, details the process of identifying, administering, and regulating the areas where said incentives can be extended.
Among the incentives the SBMA offers to investors registering in the Subic Bay Freeport are tax- and duty-free importation; exemption from all local and national taxes, with only a five percent corporate tax on gross income; unrestricted entry of foreign investments; no foreign exchange control; visas for foreign nationals; and expanded allowable deduction and higher percentage of income allowable from sources within the Customs territory for regional enterprises. (SBMA Corporate Communications)
Photo:
SUBIC-OLONGAPO BUSINESS TRIANGLE: SBMA Administrator Armand Arreza, Olongapo City Mayor James Gordon Jr., and Ayala Land, Inc. president Anthony Aquino sign an agreement for the development of a master plan for the Subic-Olongapo Central Business District Triangle project.
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