Davao City amends investment code

Subscribe Now June 29, 2012 at 10:04am

The city government is revising its investment code and is looking at exempting new business projects from paying real property taxes for up to five years instead of allowing them not to pay certain local government fees as imposed by existing ordinances. The proposal is among the main amendments to the Davao City Investment Code that members of the city council are discussing for approval in the coming weeks.

The draft proposal states that exemption of new projects from paying business taxes will be for three years "starting from the date of the first sales activity as evidenced by the first sales invoice or receipt."

Exemptions would include payment of real property tax for two years, except from fee collected by the barangay. But companies that would locate outside the center of the city would be provided with a better incentives package such as longer business tax and real property tax exemption of up to five years.

"In order for enterprises to avail of… Incentives, the concerned projects in such preferred investment areas or activities should apply for incentives with the Davao City Investment and Promotions Center within six months from the start of first sales activity," it said.

The current investment code exempts new businesses from paying mayor’s permit fee, building permit fee, and other fees and charges imposed under existing city ordinances for three years. The amount to be paid varies based on the amount of investments that will be made.

A city official earlier said that among the proposed amendments is the inclusion of both power generation and green technology on the priority list. Jason C. Magnaye, head of the Davao City Investment Promotions Center, said the city government wants to include the sector on the list to prepare for the growing power demand, which is at roughly 10% annually.

The peak demand of the city is currently 289 megawatts, or about a fourth of Mindanao’s supply.

But, Mr. Magnaye said the city government has to decide whether to include the granting of incentives to power projects that are potential polluters such as coal-fired plants.

The Aboitiz Power Corp., through its Therma South Inc., is constructing a 300-megawatt coal-fired power plant in the city.

The company, however, assured the facility would be using a modern system, or the so-called circular fluidized bed technology, to minimize, if not totally eliminate, the plant’s pollution potential.

Source: bworldonline.com

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