Law Summary
Administration of Economic Zones (ECOZONES)
- Government-owned ECOZONES to be managed by an ECOZONE executive committee.
- Privately-owned ECOZONES retain autonomy and independence.
- PEZA exercises monitoring functions to ensure compliance with laws and incentive implementation in privately-operated zones.
Personnel Management and Compensation System
- PEZA Board responsible for establishing organization, appointing officers and employees on recommendation of Director General and with DTI Secretary’s approval.
- Exclusive authority vested in Board to promote, transfer, assign or reassign officers.
- Director General empowered to remove officers and employees.
- Positions governed by a compensation, classification, and qualification system based on job analysis, comparable to compensation at SBMA, CDC, BCDA, and private sector.
- Periodic review of compensation every two years, with yearly merit adjustments allowed.
- PEZA exempt from existing laws on compensation but aligns closely with principles under RA 6758.
- Officers and employees including Board members prohibited from partisan political activities except voting.
- Removal or suspension of PEZA personnel subject to cause and compliance with Civil Service laws.
Taxation and Financial Remittances within ECOZONES
- Full exemption from all national and local taxes except real property taxes on land owned by developers.
- In lieu of taxes, all business establishments in ECOZONES shall pay 5% of gross income.
- Distribution of the 5% gross income share: 3% remitted to the National Government; 2% directly to the local treasurer of the municipality or city.
Taxation of Persons and Service Establishments
- All persons and service establishments within the ECOZONE remain subject to applicable national and local taxes under the National Internal Revenue Code and the Local Government Code.
Eminent Domain and Compensation for Displaced Persons
- PEZA empowered to evict occupants in publicly-owned ECOZONES with proper disturbance compensation.
- Displaced agrarian reform beneficiaries entitled to Comprehensive Agrarian Reform Law benefits, homelot in relocation site, and preferential employment in projects.
Non-Applicability Clause
- The provisions of this Act do not apply to economic zones or areas established under Republic Act No. 7227 or other special laws.
Effectivity
- The Act takes effect 15 days after publication in the Official Gazette or in two newspapers of general circulation, whichever is earlier.