EDGEDAVAO VOL.5 ISSUE 117 •WEDNESDAY, AUGUST 15, 2012
THE ECONOMY
5
More tax incentives for investments in city’s preferred far-flung districts By Greg G. Deligero
T
HE Davao City government will provide more tax incentives for investments poured into farflung districts. This is one of the new features of the enhanced Davao City Investment Incentive Code of 1994 which was amended by the Sangguniang Panlungsod last August 9. Under the code, the city government offers various fiscal incentives to investors who will invest in any of the preferred investment areas [PIAs]. Qualified projects are entitled to exemption from payment of local business tax for three years and basic real property tax for the real property for two years where the project is located provided this is owned by the proponent. A new feature of the code is the provision of longer incentives for investors who invest in any of the PIAs in preferred districts as defined by the city’s development plan. These districts include Calinan, Baguio, Marilog, and Paquibato. “Proponents of these projects shall be entitled to five-year exemption from the payment of business sales tax instead of three years and five-year exemption from the payment of real property tax instead of two years,” said city investment promotion chief Jason Magnaye. Under the new code, the PIAs that are retained and refined include the agribusiness sector, tourism and recreational facilities, light manufacturing and assembly, property development, health and wellness, educational and sports facilities, environmental protection or green projects and information communications technology. “For the new PIAs, we are introducing production and generation of new sources of power to address the anticipated steady growth in demand in the coming years, logistics and Infrastructure, with transshipment facilities already being subsumed under this area and those projects enrolled under the city’s Public-Private Partnership program,” said Magnaye, who presented and handled the interpellation from the city
councilors before the approval of the code’s amendment. The amended Code excluded branches of foreign banks from among the list of PIAs and for telecommunications to already be subsumed under ICT. Magnaye said the preference was derived based on the present demand of the city for additional infrastructure, lacking support services to certain business activities that are considered to be sunrise industries, and emerging trends in both the local and international markets. “As most of you may know, we are the first city in the country to have adopted an incentive code back in 1994. Today, 18 years after, almost all major cities in the country have enacted their own incentive codes. This makes it necessary for us to always review and update, if necessary, our incentive code to make it competitive against the other cities,” he said. In 2011, the Davao City Investment Promotion Center (DCIPC) initiated the amendment process of the code through a technical assistance from a program called local Implementation for national Competitiveness for Economic Growth or lInC-EG of the USAID, and in partnership with the Davao City Chamber of Commerce and Industry, the Department of Trade and Industry and the City Planning and Development Office. Magnaye said the review process was anchored on a two-pronged, holistic framework of achieving a businessenabling environment by way of improving the business permits and licensing system or BPlS and reviewing the investment promotion program of the city government. “The investment promotion component of the program was done to assess the code’s continued relevance, particularly the investment priority areas and the accompanying incentive structure,” he said. “likewise, it was reviewed to check the significance of the DCIPC in terms of its service delivery and to identify other investment promotion strategies that can be effectively carried out by the center and its partners,” he added.
INTERPELLATION. Investment promotion chief Jason Magnaye presented the enhanced Davao City Investment Incentive Code of 1994 and handled
the interpellation from the city councilors before the approval of the code’s amendment.