THE Cagayan de Oro Oil Company Inc. is now declared an Agro-Industrial Economic Zone (AIEZ) after the city council’s endorsement to the Philippine Economic Zone Authority (PEZA).
After a thorough deliberation made by the City Council during its regular session last Tuesday, the city council made a resolution to endorse the company, located at Barangay Tablon, to Peza.
With the endorsement, Councilor Juan Sia, chairperson of the City Council Committee on Trade, Commerce and Cooperatives, said the oil company will be given fiscal incentives as they will be 100 percent exempted from corporate income tax, national and local taxes.
He said the existing real property taxes and business permits of the company shall not be included in the declaration of Peza, and only the new improvement and future expansions thereof are covered by Peza.
Sia said the exemption is based on the declaration of former President Gloria Macapagal Arroyo to give the agro-business sectors privilege to be exempted from taxes to protect their economic condition.
“However, they will only pay 5 percent tax on gross income,” Sia said.
Gross income refers to gross sales, or gross revenues, derived from the registered activity, net of sales discounts, sales returns and allowances minus the cost of sales or direct costs but before any deduction is made for administrative expenses or incidental losses during a given taxable period.
With this, the Cagayan de Oro Oil Company will have a VAT-zero rating of local purchases.
Sia said the company, owned by the Cojuangcos, will only be paying a 2 percent tax. Its local brand, Minola coconut edible oil, dominates the consumer pack market segment with overall leadership in the Philippine edible oil business.
With the endorsement, Sia called on the company to also give its share and “provide protection to the city’s income,” citing a similar move of the City Council when it also endorsed a company but ended up with some P50 million losses in taxes a year.
article by Nicole Managbanag of SSC