| MEMORANDUM
CIRCULAR NO. 2004-015
To :
Economic Zone Developers and Locator Enterprises
From
: Director General LILIA B. DE LIMA
Subject : Exemption
of PEZA-Registered Economic Zone Enterprises Paying the
Special 5% Tax on Gross Income from Paying the Power Distribution
Franchise Tax
Date :
03 May 2004
Please be informed that PEZA-registered economic zone enterprises, which
are paying the special 5% tax on gross income, are exempted from paying
the Power Distribution Franchise Tax being collected by power distribution
utilities, pursuant to the provisions of Republic Act No. 7916 (“The
Special Economic Zone Act of 1995”), as amended by Republic Act
No. 8748, and the National Internal Revenue Code, as follows:
Republic
Act No. 7916, as amended by Republic Act No. 8748
“Section 24. Exemption from
National and Local Taxes. - Except for real property taxes
on land owned by developers, no taxes, local and national, shall be
imposed on business establishments operating
within the ECOZONE. In lieu thereof, five percent (5%)
of the gross income earned by all business enterprises within the
ECOZONE shall be paid and remitted as follows:
(a)
Three percent (3%) to the National Government;
(b) Two percent (2%) which shall be directly remitted by the business
esta-blishments to the treasure’s office of the municipality
or city where the enterprise is located.”
National Internal Revenue Code
of 1997
“Section. 119. Tax on Franchises.
- Any provision of general or special law to the contrary
notwithstanding, there shall be levied, assessed and collected in respect
to all franchises on radio and / or television
broadcasting companies whose annual gross receipts
of the preceding year does not exceed Ten million pesos (P10,000,000.00),
subject to Section 236 of this Code, a tax of
three percent (3%) and on electric, gas and
water utilities, a tax of two percent (2%) on the gross receipts derived
from the business covered by the law granting
the franchise: ...”
For
the guidance of all concerned. |