Council reminds Abanao to pay taxes as real estate lessor

By DELIA BAGNI
www.nordis.net

BAGUIO CITY — Members of the Baguio City council endorsed the application of the Abanao Square to the Philippine Economic Zone Authority (PEZA) to operate business process outsourcing (BPO) or call center facility with a condition that Abanao Square will continue to pay business taxes to the city government and continue to operate as a real estate lessor.

A 2,000 square meter or the 4th and 5th floor of Abanao Square is intended for PEZA-registered Information Technology (IT) facility.

According to Councilor Lourdes Tabanda, the mall will still use government facilities like the sewerage among others. She reminded that Abanao Square should pay its obligations.

In the discussions, Tabanda and other councilors said that if Abanao Square will be registered to PEZA then the City government can no longer collect business tax from the mall. Under PEZA rules, businesses under ecozones are exempted from tax collection by local governments. PEZA Baguio zone administrator Dante Quindoza however said that even only two floors will be used as PEZA ecozones and agreed that the building will still have to use public utilities so they have to pay what they should pay.

Quindoza said that PEZA-registered IT technology centers and other ecozones enjoy income tax holidays benefit for four years. He added that the centers have the option to pay special five percent tax on gross income in lieu of all national and local taxes. The City government on the other hand is entitled to a share of two percent from the five percent as provided by the law.

At present , there three main ecozones in the City nemlythe Baguio City Economic Zone in Loakan, the John Hay Special Tourism Economic Zone and the SM Baguio Cyber Zone building along Harrison Road.

Abanao Square Operations Manager Dory Vicencio said that other businesses operating inside the building are not covered by PEZA policies. Therefore, she continued they are still subject to securing business and other permits to and paying taxes from the city government.

She also said that the building still should secure permits from the city in compliance with the city government’s building code.

According to Vicencio, the IT center in Abanao Square will generate employment of 3,000-3,500 benefiting not only residents of Baguio and the Cordillera Region but also to neighboring provinces.

On the other hand, the council deffered action on the application for registration of Neutrinus Enterprises to the PEZA to run an IT center along Magsaysay Avenue.

They agreed to study further the plea of Neutrinus as it has yet to construct a building. They said the case is unlike Abanao that there is already an established building. # nordis.net