THE 21st Davao City Council on Friday approved on third and final reading the amendments to the Davao City Investment Code, which provides a comprehensive coverage of Priority Investment Areas (PIA) and expanded tax incentives for MSMEs conducting activities falling under PIA.
Davao City Councilor Myrna Dalodo-Ortiz, the ordinance's proponent, told Madayaw Davao that the amendment to the 31-year-old Investment Code ensures that the city is open to various kinds of investments, including those with modern technologies.
"Kadaghan sa need sa atong siyudad kailangan nga kita sa City Government andam na naay ma-offer sa atong investors na gusto mu-invest dinhi sa siyudad (Many of the needs of our city require that the City Government has to be ready with something to offer to investors who want to invest in the city)," she said.
Davao City Investment and Promotion Center (DCIPC) Head April Dayap, in a media interview, said that among the highlights of the newly amended Incentive Code is the comprehensive definition of businesses under agri-business. It also includes retirement villages, hotels with star ratings, theme parks, and convention centers as PIA.
She said that the PIA also covers sports tourism and different kinds of hospitals and services under the Health category.
For technology, the PIA include BPO facilities, innovations, and new inventions. Eco-industries such as electric vehicles are also now included as PIA.
The new code still follows the PIA under the 1994 Investment Code, which are agri-business, tourism, light manufacturing, property development, health, education, technology, eco-industry, infrastructure, and inclusive business activities.
Dayap said that they also made sure that businesses such as Micro, Small, and Medium Enterprises will be able to enjoy more incentives.
"We provided a graduated exemption of a maximum of five years for the payment of business tax. We also have three years tax exemptions as well for real property tax as long as it falls under preferred investment areas," she said.
Based on the new Investment Code, MSMEs doing business under PIA shall be granted the following incentives as may be determined appropriate by the Davao City Investment Promotions Board:
A graduated exemption for the payment of business tax for a maximum period of five years from the actual start of commercial operation. The exemption is on a graduated basis, meaning there will be 100 percent exemption from the first to the third year, 60 percent exemption in the fourth year, and 40 percent exemption in the fifth year.
The new code also expands the exemption from payment of basic Real Property Tax from two years to three years; and exemption from mayor’s permit fees from three years to five years, provided that local tax exemptions do not cover fees and charges imposed by the city, such as garbage fees, sanitary inspection fees, electrical inspection fees, and similar charges.
The code also exempts MSMEs from the payment of amusement tax for four years from the start of commercial operation, and exemption from payment of tax on transfer of RPT shall only apply to projects subject to amusement tax and included in PIA. CIO