BIR Ruling [DA-215-97]

June 5, 1997 BIR RULING [DA-215-97] The Chairman Ad Hoc Oversight Committee on the Bases Conversion House of Representatives Quezon City Attention: Ms . Caroline C . Sabio Committee Secretary S i r : This refers to your letter dated October 10, 1996 requesting our comments on the following House Bills, viz: 1. HB No. 2143, entitled, "An Act excluding certain portions of Fort Bonifacio Military Reservation from the coverage of the bases Conversion and Development Authority. 2. HB No. 5537, entitled, "An Act Allotting 2.5% of the proceeds of the sale of the Villamor Airbase, amending for the purpose, RA 7227, otherwise known as the Bases Conversion and Development Authority Act of 1992" 3. HB No. 5918, "An Act Amending paragraph (c) of Section 13 of RA No. 7227, otherwise known as the Bases Conversion and Development Act of 1992" Comment Since HB Nos. 2143, 5537 and 5918 have no impact in our tax collection function, it is understood that our comment is not expected. 4. HB 6534, entitled, "An Act Amending Section 12 and 14 of RA 7227 known as the Bases Conversion and Development Act of 1992" Comment This proposed bill which seeks to reduce the preferential tax on gross income earned by all business and enterprises within the Subic Special Economic Zone from 3% to 2% will certainly reduce our collection by 1/3 from P90M to P60M. The loss of 1%, however will be the gain of a local government units affected by the declaration of Special Economic Zone because the bill will also increase the share of the local government units from 1% to 2% or an increase of 1%. 5. HB 7918, entitled, "An Act Providing for the Conversion and Development of the Camp Bagong Diwa in Taguig, Metro Manila, and for its transfer to the Bases Conversion and Development Authority, amending for said purposes certain provisions of RA 7227 as amended by RA 7917 and for other purposes" Comment Under HB 7918, the conversion of Camp Bagong Diwa in Taguig, Metro Manila into a SEZ, and its transfer to BCDA will encourage foreign investors to come in, and avail of the incentives provided for under RA 7227, just like other ECOZONES declared by the President for Clark and Subic . Subject to existing rules and regulations prescribed for the effective implementation of RA 7227, we endorse this House Bill. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue