1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
THIRTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PEJILPPINES 
) 
Second Regular Session 
1 
,,;; 
->> 
’:,,- 
’,$ 
(5 
i . ’: 
, i. 
,”.$. 
. 
SENATE 
s a  
”.,,“ ,I.. ...i,,-.*,, 
. ,, ;:;/ 
:,-”** 
SBNO. 2260 
(In substitution of KB No. 5064,) 
_I_ 
Prepared by the Committees on Ways and Means and on Government Corporations and 
Public Enterprises with Senators Recto and Gordon as authors thereof 
- 
AN ACT 
AMENDING REPUBLIC ACT NO. 7227, AS AMENDED, OTHERWISE KNOWN 
AS THE BASES CONVERSION AND DEVELOPMENT ACT OF 1992, AND FOR 
OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assem bled 
SECTION 1. Section 12 of Republic Act No. 7227, as amended, otherwise 
known as the Bases Conversion and Development Act of 1992, is hereby amended, to 
read as follows: 
“SEC. 12. Subic Special Economic Zone. - x x x. 
“(a) x x x .  
“(b) The Subic Special Economic Zone shall be operated and 
managed as a separate customs territory ensuring free flow or 
movement of goods and capital within, into and exported out of the 
Subic Special Economic Zone, as well as provide incentives such 
as tax and duty-free importations of raw materials AND capital 
[and] equipment. However, exportation or removal of goods from 
the territory of the Subic Special Economic Zone to the other parts 
of the Philippine territory shall be subject to customs duties and 
taxes under the [Customs and] Tariff AND CUSTOMS Code OF 
15 
THE PHILIPPINES, 
AS: ‘AMENDED, THE NATIONAL 
16 
17 
INTERNAL REVENUE CODE OF\ 1997, AS AMENDED, and 
other relevant tax laws of the Philippines;” 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
“(c) The provision of existing laws, rules snd regulations to 
the contrary notwithstanding, no taxes, local and national, shall be 
imposed within the Subic Special Economic Zone. In lieu of 
SAID [paying] taxes, A FIVE PERCENT (5%) TAX ON [three 
percent (3%) of the] gross income earned SHALL BE P A D  by all 
business[ses and] enterprises within the Subic Special Economic 
Zone AND shall be remitted AS FOLLOWS: THReE PERCENT 
(3%) to the National Government, [one percent (1 %)] AND TWO 
PERCENT (2%) [each] to THE local government units affected by 
the declaration of AND CONTIGUOUS TO the zone, NAMELY: 
THE CITY OF OLONGAF’O AND THE MUNICIPALITIES OF 
SUBIC, 
S A N  
ANTONIO, 
S A N  
MARCELINO 
AND 
CASTILLEJOS OF THE PROVINCE OF ZAMBALES; AND 
THE MUNICIPALITIES OF MORONG, HERMOSA AND 
DINALLPI” 
OF THE PROVINCE OF BATAAN, in 
proportion to their population, =.ea and other factors. [In addition, 
there is hereby established a development fund of one percent 
(1%) of the gross income earned by all businesses and enterprises 
within the Subic Special Economic Zone to be utilized for the 
development of municipalities outside the City of Olongapo and 
the Municipality of Suhic, and other municipalities contiguous to 
the base areas]. 
‘k x x.” 
SEC. 2. Section 15 of Republic Act No. 7227, as amended, is hereby amended, to 
read as follows: 
“Sec. 15. Clark and Other Special Economic Zones. - Subject 
to the concurrence by resolution of the local government units 
directly affected, the President is hereby authorized to create by 
executive proclamation a Special Economic Zone covering the lands 
2 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
occupied by the Clark military reservatioris and its contiguous 
extensions as embraced, covered and defined b1y the 1947 Military 
Bases Agreement between the Philippines and the ‘JJnited States of 
America, as amended, located within the tenitorial jurisdiction of 
Angeles City, Municipalities of Mabalacat and Porac:, Province of 
Pmpanga, and the [inu~icipality] MUNICIPALITL€?S of Capas 
AND BAMBAN, Province of Tarlac, in accordance with the 
provision as herein provided insofar as applied to the Clark military 
reservations. 
“REGISTERED BUSINESS ENTERPRISES ENGAGED 1N 
EXPORT-ORIENTED AND TOURISM-RELATED ACTWITIES 
REGISTERED WITH THE CLARK SPECIAL ECONOMIC ZONE 
CREATED UNDER EXECUTIVE ORDER NO. 80, SERIES OF 
1993; PORO POWT SPECIAL ECONOMIC AND FREEPORT 
ZONE CREATED UNDER PROCLAMATION NO. 216, SERIES 
OF 1993; JOHN HAY SPECIAL ECONOMIC ZONE CREATED 
UNDER PROCLAMATION NO. 420, SERIES OF 1994; AND 
MORONG SPECIAL ECONOMIC ZONE CREATED UNDER 
PROCLAMATION NO. 984, SERIES OF 1997 SHALL HAVE 
THE FOLLOWING INCENTIVES: 
(A) 
A FIVE PERCENT (5%) TAX ON GROSS INCOME 
IN LIEU OF ALL NATIONAL, AND LOCAL TAXES SHALL 
BE PAID BY THE REGISTERED BUSINESS ENTERPRISES 
ENGAGED 
IN 
EXP0RT;OIUENTED 
AND 
TOURISM- 
RELATED ACTIVITIES WITHIN THE ZONE. HOWEVER, 
EXPORTATION OR REMOVAL OF GOODS FROM THE 
TERRITORY OF THE CLARK AND OTHER SPECIAL 
ECONOMIC ZONES TO THE OTHER PARTS OF THE 
PHILIPPINE 
TERRITORY 
SHALL BE 
SUBJECT TO 
3 


1 
2 
3 
4 
5 
6 
7 
S 
9 
10 
11 
12 
13 
14 
15 
16 
17 
1s 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
CUSTOMS DlJTIES AND TAXES UNDER THE T..4RIFF AND 
CUSTOMS CODE OF THE PHILIPPINES, AS AMENDED, 
THP, NATIONAL INTERNAL REVENUE CO.DE OF’ 1997, AS 
AMENDED, AND OTHER RELEVANT TAX LAW9 OF THE 
PHCIPPINES. 
“THE F N E  PERCENT (5%) TAX ON GROSS INCOME 
SHALL BE SHARED, DISTRIBUTED AND REMITTED AS 
FOLLOWS: 
(1) TI-DLEE 
PERCENT 
(3%) 
TO 
THE ‘NATIONAL 
GOVERNMENT; 
(2) TWO PERCENT (2%) WHICH SHALL BE DIRECTLY 
REMITTED BY THE BUSINESS ENTERPRISES TO 
THE TREASURERS OFFICE OF THE MUNICIPALITY 
OR CITY WHERE THE ENTERPRISE IS LOCATED.” 
“X x x.” 
SEC. 3 . Implementing Rules and Regulations. - The Department of Finance, in 
coordination with the Bureau of Internal Revenue and the Bureau of Customs, and in 
consultation with the Bases Conversion and Development Authority, the Subic Bay 
Metropolitan Authority, the Clark Development Corporation, the John Hay Management 
Corporation, the Poro Point Management Corporation, and the Bataan Technology Park, 
hc., shall promulgate and publish the necessary rules and regulations for the effective 
implementation of this Act within two (2) months from the date of effectivity of this Act. 
SEC. 4. Separability Clause. - If any portion or provision of the Act is declared 
unconstitutional, the remainder of this Act or any provision not affected thereby shall 
remain in force and effect. 
SEC. 5. Repealing Cluuse. - All laws, decrees, orders, rules and regulatiolls or 
other issuances or parts thereof inconsistent with the provisions of this Act are hereby 
repealed or modified accordingly. 
4 


1 
2 
3 
whichever comes earlier. 
SEC. 6. E#ectivi@. - This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in any two (2) newspapers of general circulation, 
Approved, 
5