PRESIDENTIAL DECREE NO. 1786, January 15, 1981
FURTHER AMENDING PRESIDENTIAL DECREE NO. 66 DATED NOVEMBER 20, 1972, CREATING THE EXP0RT PROCESSING ZONE AUTHORITY
dispersal, employment generation and export promotion, L0I l033 has mandated the
development of twelve (12) more export processing zones in strategic locations
in the Philippines;
WHEREAS, in order to make export processing zones more
competitive and attractive to potential investors, and to increase the
capability and effectiveness of the Export Processing Zone Authority(EPZA) in
the attainment of its objectives it has become necessary to update and amend the
incentive schemes for enterprises within the zone;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
order and decree the further amendment of Presidential Decree No. 66, dated
November 20, 1972, as amended; as follows:
SECTION 1. Gross receipts of registered zone enterprises
shall be exempt from the contractor’s tax under Section 205 of the Tax Code of
1977, as amended.
SECTION 2. A net operating loss incurred in any of the first
ten years of operation as a registered zone enterprise may be carried over as a
deduction from taxable income for the six years immediately following one year
of such loss. The ent. amount of the loss shall be carried over to the first of
six taxable years following the loss, and any portion of such loss which exceeds
the taxable income of such first year shall be deducted in like manner from the
taxable income of the next remaining five year. The net operating loss shall be
computed in accordance with the provisions of the National Internal Revenue
Code, any provision of this Decree to the contrary notwithstanding, except that
income not taxable either in whole or in part under this Decree or other laws
shall be included in gross income.
SECTION 3. The bond obligations of EPZA, whether principal
or interest, are hereby converted as capital contribution of the National
Government to EPZA. The capitalization of EPZA shall be credited for the
corresponding amount as each principal or interest matures.
SECTION 4. Production equipment or machineries, not attached
to real estate, used directly or indirectly in production, assembly or
manufacture of the registered
export products of registered zone enterprises
shall be exempt from real property tax.
SECTION 5. Utility companies, including the National Power
Corporation, Philippine Long Distance Telephone Company, water supply and telex
companies shall extend priority service to export processing zones, and shall
extend to EPZA the terms and rates prescribed for public utilities of the most
preferred terms and rates possible, whichever is lower. EPZA shall have the
option within any zone or area administered by it, to install, manage and
operate facilities, utilities and systems necessary for its operation.
SECTION 6. The administration and enforcement of the
provisions of Presidential Decree No. 1096, otherwise known as the National
Building Code of the Philippines in all zones and areas owned or administered by
the Authority shall be vested in the Administrator or his duly authorized
representative. He snail appoint such EPZA qualified personnel as may be
necessary to act as Building Officials who shall be charged with the duty of
issuing Building Permits in the different zones. All fees and dues collected by
the Building Official under the National Building Code shall accrue to the
Authority.
SECTION 7. Foreign nationals employed under the provisions
of Presidential Decree No. 66, their respective spouses, and unmarried children
under twenty-one years of age shall be issued a multiple entry visa, valid for a
period of one year, to enter and leave the Philippines without further
documentary requirements other than valid passports or other travel documents in
the nature of passports. The validity of the multiple entry special visa shall
be extendible yearly. Foreign Nationals who have been issued multiple entry
special visas under this provision, as well as their respective spouses and.
dependents, shall be exempt from obtaining alien certificates of registration
and emigration clearances certificates and all types of clearances required by
any government department or agency. For this purpose, the Commission on
Immigration and Deportation and the EPZA shall jointly issue the necessary
implementing rules and regulations.
SECTION 8. Any provision of law to the contrary
notwithstanding the EPZA, in consultation with the Bureau of Customs, shall
adopt Procedures which would facilitate the rapid movement of raw materials,
components, goods, commodities and finished products to and from export
processing zones, taking into account the need to attain the objectives of
customs and internal revenue regulations and the need to facilitate export
activities within the zone.
SECTION 9. The EPZA, in the exercise of its sole POLICE
authority over export processing zones and areas owned or administered by the
Authority, shall have the power to receive and investigate complaints relative
to violations of penal laws committed inside the zones and areas owned or
administered by the Authority, and when the evidence warrants, to file and be
deputized herein to prosecute the corresponding criminal cases before the
appropriate court of body.
SECTION 10. The Authority, through its Board of
Commissioners may segregate not more than twenty per cent (20%) of the land area
of each zone to be sold, leased or otherwise disposed of primarily for housing
and community purposes. The disposition and development of the area segregated
shall be subject to such terms and conditions as may be prescribed by the
Authority.
SECTION 11. With respect to, and for expeditious
implementation of EPZA infrastructure projects, the power to approve detailed
engineering documents, awards and contracts executed as a result of competitive
public biddings, negotiated contracts, assignment of contracts, adjustment of
contract prices and change orders, extend work orders now vested in the Minister
of Public Works, Transportation and Communication, the Minister of public
Highways or the Minister of Energy by Presidential Decree No.1594 and its
implementing rules and regulations, are hereby vested in the Minister of
Industry.
SECTION 12. The capital of the Authority shall consist of
(1) its existing assets and such other properties as may be contributed to the
Authority by the Government to form part of capital, (2) all capitalized
surplus, and (3) cash contribution by the Government in the amount of two
billion pesos, which is hereby appropriated out of any fund in the National
Treasury bills or notes, or derived from any other sources of income, by or the
National Government, Which amount shall be programmed and released by the Budget
Commission with approval of the President in accordance with the schedule of
development and expenditure to be prepared and submitted by the Authority:
Provided, however, That any budgetary outlay allocated and released in
favor of the Export processing Zone authority and/or Foreign Trade Zone
-Authority shall be correspondingly credited to the authorized capitalization
herein provided.
SECTION 13. The positions of
Administrator, Senior Deputy Administrator, and Deputy Administrator are hereby
declared to be policy-determining and primarily confidential. The Administrator
be ex-officio Vice Chairman of the EPZA Board of Commissioners.
SECTION l4. All laws, executive orders, rules and
regulations or part thereof inconsistent with this Decree are hereby repealed
and/or modified accordingly.
SECTION 15. This Decree shall take effect immediately.
Done in the City of Manila, this 15th day of January, in the year of Our
Lord, nineteen hundred and eighty-one.
(Sgd.) FERDINAND E. MARCOS
President of the
Philippines
By the President: (Sgd.) JUAN C. TUVERA Presidential Executive Assistant
Vol. 25, Vital Documents, Presidential Decree 1980-1981