Cinco, Merrycris T.

BA-412
BSMA-4 Fri-Sat- 4:30-6:00pm

PEZA & Economic Development

Starting up a new company is challenging, and business owners will require all the
assistance they can get to get started. One of the organizations that provide numerous incentives
that can support the establishment of a successful business in the Philippines is PEZA. It is also
referred to as the Philippine Economic Zone Authority a Department of Trade and Industry
(DTI) organization established to encourage foreign investment in the Philippines. It particularly
offers support to foreign organizations in enabling business operations of investors in particular
regions of the nation known as PEZA Special Economic Zones. Businesses that have been
accredited and hold a PEZA certificate are eligible for both fiscal and non-fiscal benefits.
Additional benefits include the potential to avoid some taxes and benefit from more quickly
processed registration and permit procedures.

One of the most significant advantages of PEZA for a nation is that the incentives it
provides should be kept in place because they are unquestionably effective, globally competitive,
and attractive to investments that bring in money through taxes to fund social services and
generate employment for both the Filipino people and the nation. It is a common misconception
that the country is losing revenue as a result of tax breaks. In fact, it generates more even
income, revenues, or additional taxpayers by bringing capital and tax payments to the
government from foreign and domestic investors. In fact, for the past 27 years, PEZA has
managed 416 economic zones, which house 3,557 locator companies. From 1995 to 2021, these
companies invest P4.036 trillion, exported $933.835 billion, and employ 1.7 million people.
Without a doubt, the incentives provided by PEZA have attracted investments that contribute to
much-needed revenues and taxes.

In conclusion, it should be emphasized that PEZA's incentives should be maintained

considering PEZA has always contributed toward generating taxes and revenues that fund social
services and encourage national economic progress. The effectiveness of PEZA incentives is
demonstrated by their performance. Tax incentives help the nation's economy by creating
income, jobs, investments, and exports. As a result, investors pay taxes to the federal government
and local governments that sponsor economic zones, creating multiplier effects. These taxes
ultimately help pay for essential social services in the nation including security, health care, and
education.