RMC No. 57-2010: Circularizes Sections 3, 4 and 7 of Republic Act No. 10083, an Act amending the “Aurora Special Economic Zone Act of 2007”

Key points

1. Ecozone incentives and removal of goods. Under Section 4 of RA No. 9490, the Aurora Ecozone may provide tax and duty free importation of raw materials, capital and equipment to registered enterprises. Goods exported or removed to other parts of the Philippines are subject to customs duties and taxes under the Tariff and Customs Code and the NIRC.
2. 5% tax on Gross Income Earned. Registered enterprises pay 5% of gross income earned in lieu of local and national taxes such as income tax, excise tax and franchise taxes, except real property tax on land. The 5% is split into 3% to the National Government, 1% to the provincial and municipal treasurers in equal shares, and 1% to the APECO.
3. Other persons in the ecozone. All persons and service establishments in the Aurora Ecozone are subject to national and local taxes under the NIRC of 1997, as amended, and the Local Government Code.
4. Merchandise. Merchandise brought into the Ecozone for sale, storage, processing or manufacture is not subject to customs and internal revenue laws or local tax ordinances. Domestic merchandise sent outside is subject to internal revenue laws as domestic goods, and merchandise sent outside is subject to the rules on imported merchandise, with duties and taxes based on the value of the imported materials, except when the final product is exempt.
5. Non-profit APECO and donations. APECO is non-profit and uses its 1% share for operations and development. It is exempt from taxes, fees and costs in court or administrative proceedings, and donations to it are exempt from donor’s tax and deductible from the donor’s gross income. 100% of the national government’s share of the 5% tax goes over a ten (10)-year period to an infrastructure development trust fund.
6. Same privileges as other ecozones. APECO enjoys the same privileges, licenses or concessions granted to other ecozones and free trade zones, such as Subic, Clark, Zamboanga City and Cagayan.

Who is affected

• Registered enterprises in the Aurora Ecozone
• Persons and service establishments in the Aurora Ecozone
• Donors to APECO

Deadlines and effectivity

• RA No. 10083 lapsed into law on April 22, 2010
• Published May 10, 2010
• National share of the 5% appropriated over a ten (10)-year period