No confirmation yet that Peza firms can keep zero VAT

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The Philippine Economic Zone Authority (PEZA) still has not received assurance that its more than 4,000 registered companies, mostly business process outsourcing firms, can keep the zero-rated value added tax (VAT) of their local purchases. The Bureau of Internal Revenue (BIR) has not yet issued a clear answer on the fate of Peza-related tax incentives. BIR, but has told Peza that the issue still requires discussions. Should the incentive be terminated, this could be a major disincentive for Peza-registered companies to source locally, opting instead to depend on imports, which are also currently being granted tax exemptions, analysts said.

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