AN ACT AMENDING REPUBLIC ACT NO. 7227

Case Overview and Summary

Summary of Republic Act No. 9400

Subic Special Economic Zone (Section 1)
- Operates as a separate customs territory with free flow of goods and capital.
- Tax and duty-free importation of raw materials, capital, and equipment.
- Goods exported to other parts of the Philippines are subject to customs duties and taxes.
- 5% tax on gross income earned: 3% to the National Government, 2% to local government units.

Clark Special Economic Zone (CSEZ) and Clark Freeport Zone (CFZ) (Section 2)
- CSEZ covers lands occupied by Clark military reservations and extensions.
- CFZ is a freeport zone within CSEZ, operated as a separate customs territory.
- Tax and duty-free importation of raw materials and capital equipment.
- Goods exported to other parts of the Philippines are subject to customs duties and taxes.
- 5% tax on gross income earned: 3% to the National Government, 2% to the municipality or city.

Poro Point Freeport Zone (PPFZ) (Section 3)
- Operates as a freeport and separate customs territory.
- Tax and duty-free importation of raw materials and capital equipment.
- Goods exported to other parts of the Philippines are subject to customs duties and taxes.
- 5% tax on gross income earned: 3% to the National Government, 2% to the municipality or city.

Morong Special Economic Zone (MSEZ) (Section 4)
- Tax and duty-free importation of raw materials and capital equipment.
- 5% tax on gross income earned: 3% to the National Government, 2% to the municipality or city.

John Hay Special Economic Zone (JHSEZ) (Section 5)
- Registered business enterprises are entitled to tax and duty incentives under Republic Act No. 7916.
- PEZA registers, regulates, and supervises registered enterprises within JHSEZ.

Conflict Resolution and Applicability (Section 6)
- In case of conflict between national and local laws, tax exemption privileges in CFZ, PPFZ, JHSEZ, and MSEZ shall prevail.
- CFZ and PPFZ are subject to certain provisions of Section 12 of Republic Act No. 7227.

Existing Registered Enterprises (Section 7)
- Business enterprises registered and granted incentives by CDC, PPMC, JHMC, and BTPI are entitled to the same incentives until expiration of their contracts.

Administration, Implementation, and Monitoring (Section 8)
- Governing authorities are responsible for administering and implementing incentives.
- DOF shall create a single database of all incentives and monitor and review them.

Penal Provision (Section 9)
- Registered business enterprises found guilty of smuggling shall be perpetually barred from doing business in any freeport and special economic zone.

Implementing Rules and Regulations (Section 10)
- DOF, in coordination with PEZA, BIR, BOC, and in consultation with BCDA, SBMA, CDC, JHMC, PPMC, and BTPI, shall promulgate rules and regulations within two months.

Repealing Clause (Section 12)
- Repeals or modifies inconsistent laws, decrees, orders, proclamations, rules, and regulations.
- Repeals Section 50 of Republic Act No. 7916 and Section 13(b)(3) of Republic Act No. 7227 regarding public utilities.

Effectivity (Section 13)
- The Act shall take effect 15 days after publication in the Official Gazette or in two newspapers of general circulation.