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PRESIDENTIAL DECREE NO. 1786
PRESIDENTIAL DECREE NO. 1786 -
FURTHER AMENDING PRESIDENTIAL DECREE NO. 66 DATED NOVEMBER 20, 1972,
CREATING THE EXPORT PROCESSING ZONE AUTHORITY
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WHEREAS,
for the purpose of accelerating industries dispersal, employment
generation and export promotion, LOI 1033 has mandated the development
of twelve (12) more export processing zones in strategic locations in
the Philippines;chanroblesvirtualawlibrary
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;chanroblesvirtualawlibrary
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:cralaw:red
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. chanroblesvirtualawlibrary
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 the year of such loss. The entire 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 years. The next 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 the 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 shall 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. chanroblesvirtualawlibrary
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 or
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. chanroblesvirtualawlibrary
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
shall be ex-officio Vice Chairman of the EPZA Board of Commissioners.
Section 14. 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.
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