Wednesday, August 22, 2007 Naga mulls tax holiday for SMEs, investors with locals as workers
THE Naga Municipal Government is planning to provide tax incentives to small and medium enterprises (SMEs) that will hire town residents.
The move would encourage SMEs to prioritize residents in the hiring of workers, said Naga Mayor Valdemar Chiong.
“This would probably lessen the income of the local government unit (LGU) but what is important (is) that we can provide (more) job opportunities for the people in Naga,” he said in a mobile phone interview.
The mayor believes though that once Naga becomes a city, there would be more investors coming in, which will offset the effect of the tax holidays to SMEs.
He said SMEs that will qualify for the tax incentive are those with 80 percent of their workforce coming from Naga.
The tax incentive plan still needs the approval of the Municipal Council, though.
Chiong said he will forward the proposal to the Municipal Council shortly after the plebiscite for the town’s cityhood on Sept. 2.
He said he hopes the tax incentive program will be implemented next year.
The mayor revealed that a team is studying the mechanics of the incentive program, including the requirements for SMEs and other companies to avail themselves of the tax perks.
Among the factors to be considered are the size of the company’s workforce, amount of investment and the length of time it has been operating in the town.
The program will also have to ensure that hired residents will become regular workers and not just on a contractual basis, Chiong said.
To ensure that residents will have the skills required by companies and future investors, Chiong said the LGU will be conducting training courses.
He said he is also getting information on the type of investors that will be locating in Naga with the establishment of the SME Industrial Park in the area. (TEP)
