The Philippine national government, through the Board of Investments (BOI), offers incentives to investors in priority activities under the Omnibus Investments Code of 1987. Developers of and locators in special economic zones may also avail of incentives through the Philippine Economic Zone Authority (PEZA).
In addition to those offered by the national government, new investors and existing firms in Naga City are entitled to local incentives under the 1997 Investment Incentives Code. Enterprises that want to avail of these incentives have to register with the Naga City Investment Board. Incentives may be fiscal or non-fiscal.
Fiscal incentives refer to exemption from payment of local taxes, fees and charges. These are available to firms locating in Naga’s priority investment areas or those engaging in other priority investment activities.
Non-fiscal incentives, on the other hand, refer to the services and assistance provided to investors by the NCIB and other city government departments to facilitate a registered enterprise’s operationalization and entry into the market. These are available to all firms, including those that do not qualify for fiscal incentives.
New Investments in Priority Investment Areas and Priority Economic Activities
Investments in encouraged industries in Naga’s growth zones, or those in other economic activities, are generally entitled to the following fiscal incentives during the first 5 years of operation:
Exemption from the payment of basic real property taxes
Exemption from the payment of business taxes
Investments within the Panganiban-Roxas Growth Triangle and the Naga South Riverfront Growth Area, as well as those falling under the category of joint agribusiness ventures, expansion projects and green investments, however, have a separate schedules of incentives.
Locators in the Panganiban-Roxas Growth Triangle and the South Riverfront Growth Area
Investments in these areas are exempted from the payment of business taxes until the end of 2004, regardless of the time the firm started operations.
The additional facilities or equipment installed as a result of expansion, or additional floors constructed to make existing buildings within the Central Business District-I 3 storeys or higher, are exempt from the payment of basic real property taxes for a period of 5 years.
Joint Agribusiness Ventures
Joint agribusiness ventures shall enjoy the following incentives for a period of 6 years:
* Exemption from the payment of basic real property taxes
* Exemption from the payment of business taxes.
An existing enterprise that repaints all portions of its building or other structures which are visible, or will be visible, to the public and its clientele is eligible to deduct from gross receipts its direct painting cost. This, however, is subject to the following conditions:
1. The paint job is not the first for the structures.
2. The building, or buildings, are located within any of the city’s urban barangays.
3. The deduction should not exceed 30% of the gross receipts for the year. Any excess may be charged against succeeding tax years for a maximum period of 3 years subject to the same ceiling of 30% of gross receipts.
4. Availment can be only once every 3 years.
An enterprise which plants trees at specified locations is entitled to deduct P 10,000 from its gross receipts for each growing tree, subject to the following conditions:
1. To be qualified for incentive, a tree must have been growing for at least 1 year and must be at least 4 feet in height at the time it is applied for incentives.
2. The deduction should not to exceed 30% of the gross receipts for the year. Any excess may be charged against succeeding tax years for a maximum period of 3 years subject to the same ceiling of 30% of gross receipts.
3. A tree or trees which are destroyed or otherwise die due to negligence by the enterprise within the period of availment shall result in the addition of P 10,000 to the current tax base for each tree lost.
4. Availment can only be once every 3 years.
5. The incentive is non-transferable. In case of a change of ownership of the enterprise, the incentive shall not be transferred to the new owner but shall continue to be enjoyed by the original owner and applied to his new business enterprise, if any, provided that the period of incentive shall prescribe within 2 years from the date of application regardless of whether the owner availed of it or not.
6. An enterprise availing of this incentive must file an application with the NCIB regarding its intent to plant, the kind of trees to be planted, location and the date of planting. Planting shall be completed within 1 month from approval of the application.
An existing enterprise which landscapes its premises or other approved areas may deduct the direct landscaping cost from its gross receipts subject to the following conditions:
1. The deduction should not to exceed 30% of the gross receipts fo the year. Any excess may be charged against succeeding tax years for a maximum period of 3 years subject to the same ceiling 30% of gross receipts.
2. The incentive may be availed of only once every 3 years.
The Naga City Investment Board, along with other government and non-government agencies, operates a One-Stop-Shop to take care of investor needs. One-stop services are available to all investors even if they will not engage in projects that are within the city’s priority investment areas and activities. These services include:
* Assistance in securing permits and licenses – this covers processing of local permits and facilitation of national government requirements– including registration, land conversion, and availment of incentives with the BOI and PEZA
* Assistance in identifying business location and factory site
* Joint venture match-making
* Facilitating access to financial and technical assistance programs of the government
* Facilitating service connections with local utilities
* Other non-fiscal incentives as may be needed by the investor.
Apply for incentives/Avail of NCIB services