COMPREHENSIVE INVESTMENT INCENTIVES ORDINANCE

by Municipality of Miagao | Aug 10, 2011 | Ordinances

OFFICE OF THE SANGGUNIANG BAYAN

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EXCERPT FROM THE MINUTES OF THE 17^TH REGULAR SESSION OF THE CY2004-CY2007 SANGGUNIANG BAYAN OF THE MUNICIPALITY OF MIAGAO, PROVINCE OF ILOILO FOR CALENDAR YEAR 2005 HELD ON MAY 03, 2006 AT THE SESSION HALL OF THE MUNICIPAL LEGISLATIVE BUILDING

PRESENT:

Hon. Ramon M. Nismal, Jr. – Member

Hon. Jose Rey N. Noble – Member

Hon. Orlando S. Paulma – Member

Hon. Marcos M. Saquian, Sr. – Member

Hon. Suzita M. Go – Member

Hon. Anthony M. Ticorda – Member

Hon. Jose Rey S. Palmos – Member

Hon. Leonardo N. Naldoza – Member

Hon. Serafin F. Monteclaro – Member, Liga ng mga Barangay President

ABSENT:

Atty. Raul F. Facon – Vice Mayor (Acting Mayor)

Hon. Russel B. Nolledo – Member, PPSK President (on leave)

MUNICIPAL ORDINANCE NO. 01

Series of 2006

COMPREHENSIVE INVESTMENT INCENTIVES ORDINANCE OF THE MUNICIPALITY OF MIAGAO

[Author: Atty. Orlando S. Paulma]

WHEREAS, the Local Government Code of the Philippines empowers the local government unit to grant tax exemptions, incentives or reliefs to encourage investment for economic growth and progress in the countryside;

WHEREAS, there is a need to grant tax exemptions and investment incentives to qualified enterprises in the Municipality of Miagao in order to improve and develop the municipality’s investments climate and attract both foreign and local investors in business and industry;

WHEREAS, the comprehensive investment incentives program will serve to promote and attract private investments, both foreign and domestic, which could accelerate economic and tourism growth in the municipality and in the province as a whole;

NOW THEREFORE, be it ordained, by the Sangguniang Bayan of the Municipality of Miagao, in session duly assembled that:

CHAPTER 1

TITLE AND DECLARATION OF POLICY

Section 1. — Title – This ordinance shall be known as “The Comprehensive Investment Incentives Ordinance of the Municipality of Miagao”

Section 2. Declaration of the Policies

1) It is the responsibility of the Municipality of Miagao to attract, promote and welcome private Filipino and foreign investments in industry, trade, tourism, scientific and technological transfers, agriculture, waste management/treatment facilities, and other sectors of the economy which can provide significant employment opportunities to local qualified residents relative to the amount of the investment, increase productivity of the land and improve utilization of the products thereof; improve technical skills of the people employed in the enterprises, and provide a foundation for the acceleration and enhancement of the local as well as the national economy.

2) Unless otherwise provided herein, the tax exemption and incentives shall take effect for a period of not more than five (5) years from the start of actual commercial operation of new or expanded enterprises as provided herein.

3) The Municipality shall grant to persons or entities whose businesses significantly contribute to the attainment of these objectives, such tax exemptions and incentives devised to compensate for market imperfections, and to reward performance contributing to economic development and enhancing local employment opportunities.

4) All registered and qualified persons or entity, both foreign and local, who are investors within the territorial jurisdiction of the Municipality of Miagao, will be granted tax exemptions or incentives with respect to local government taxes, fees and charges on business and on the gross sales or receipts for specific periods of time under this ordinance.

CHAPTER II

INVESTMENT INCENTIVES BOARD

Section 3. – The Municipality Investment Incentives Board. There is hereby created the MiagaoInvestment Incentives Board ( MIIB ) to carry out the provisions of this ordinance.

Section 4. – Composition of the Board. The Board shall be composed of the following:

1. Chairman – Municipal Mayor

2. Vice Chairman – Chairman, SB Committee on Trade and Industry

3. Members:

a. Municipal Treasurer or his representative, who shall act as the

Secretary of the Board;

b. Municipal Planning and Development Officer or his

representative;

c. Municipal Assessor or his representative;

d. President of the Miagao Business Club;

e. President of the Miagao Retailers Association;

f. Two (2) Members of the Sangguniang Bayan to be chosen by it;

g. Municipal Tourism Officer

Provided that the membership of the board may be increased or decreased by the Sangguniang Bayan ( SB ) through the recommendation of the Board as it may deem necessary for the effective implementation of the provisions of this ordinance.

Section 5. Meeting and Quorum of the Board. The Board shall meet at least once every quarter or as maybe necessary, at such day and time as it may fix. The presence of the majority of the membership (which is 50 % + 1) shall constitute quorum to transact business.

Section 6. Powers and function of the Board. The board shall establish policies and guidelines which will encourage domestic and foreign investments and business activities consistent with the development needs of the Municipality. Pursuant to this, the Board shall be vested with the following powers and functions:

a) To promulgate the rules, regulations and guidelines implementing this ordinance;

b) To identify other priority or preferred investment areas and/or activities to be promoted as well as recommend to the Sangguniang Bayan appropriate incentives and support measures which shall be extended to new and existing investors in order to attract new investments or expansions in those areas/activities;

c) Adopt a short and medium term investment program which shall specify the list of priority investment areas /activities and the corresponding incentives and support measures;

d) To designate a secretariat of the Board and to supervise the same in its operations specifically in the implementation of the provisions of this ordinance;

e) To secure additional funding and resources to supplement the budgetary support provided by the Municipality for the operation and implementation of this ordinance.

f) To enter into any agreement with other government agencies, private sector organizations for the purpose of simplifying the systems, procedures, requirements on investments and business operation in the Municipality of Miagao, subject to the approval of the Sangguniang Bayan.

CHAPTER III

DEFINITION OF TERMS

Section 7. Definition of Terms. When used under this ordinance, the following terms and phrase shall be construed to mean as :

a) Board shall refer to the Miagao Investment Incentives Board ( MIIB ) created under this ordinance .

b) Municipality shall mean the Municipality of Miagao covering all the areas within its territorial jurisdiction as provided for by law.

c) Ordinance shall refer to the Comprehensive Investment Incentives Ordinance of the Municipality of Miagao.

d) Existing establishments/enterprises shall refer to those establishments/enterprises whose places of operation or production are located within the territorial jurisdiction of the Municipality at the time of the approval of this ordinance and those who registered or started its operation in the Municipality of Miagao in 2005.

e) New investors shall refer to those prospective investors who have not engaged in any kind or type of business in the municipality or have not engaged in full commercial operation at the time of the approval of this ordinance.

f) Local personnel/workers refer to workers or personnel who are bonafide residents of the Municipality of Miagao.

g) Registered and qualified enterprises shall mean any individual, partnership, cooperative, corporation or other entity incorporated and/or organized and existing under Philippine laws, or the laws of the country or residence or registration in the case of foreigners;

h) Processing shall mean converting of raw materials into marketable form through physical mechanical electrical, biochemical, biological or other means or by a special treatment or a series of action, such as slaughtering, milling, pasteurizing the products. Merely packaging or repacking shall not constitute processing.

CHAPTER IV

INVESTMENT PRIORITIES PLAN

Section 8. Investment Priorities Plan (IPP). A list of priority investment areas/ activities shall be prepared and drawn up by the Board, which shall include and contain:

a) The specific activities and generic categories of economic activities where investments are to be encouraged, provided that the following enterprises or undertakings shall be given priority under this ordinance .

I. Labor generating or labor intensive enterprises;

II. Enterprises established in less developed areas as may be determined by

zoning ordinance.

III Manufacturing enterprises using raw materials that are available locally;

IV. Manufacturing Plants

V. General Merchandising or consumer-oriented firms;

VI. Export-oriented industries

VII. Tourism-oriented industries

VIII. General engineering and building contractors;

IX. Utility companies engaged in power generation and for distribution,

water, telecommunications and those of similar nature;

X. Commercial buildings ( new or expansion );

XI. Housing development whether socialized or non – socialized

XII. Information Technology enterprises

b) Specific public utilities which qualifies for incentives under this ordinance and which shall be supported by studies of existing and prospective regional demands for the services of such public utilities in the light of the level and structure of income, production, trade, prices and relevant economic and technical factors of the regions as well as the existing facilities to produce such services;

c) Specific activities where the potential for utilization of indigenous and non-petroleum based fuels or sources of energy can best be promoted, and

d) Such other information, analysis, data, guidelines, or criteria as the Board may deem appropriate .

The identified Investment Priorities Plan (IPP) may be revised yearly for maximum flexibility as the Board may deem it necessary .

Section 9. Review of Incentives. The board shall review the package of appropriate incentives and support measures every two (2) years. Without prejudice to existing rights of registered investors/enterprises, the Board may, at any time, revise or discontinue the grant of incentives or support measures for any area of activity, if such area of activity places the interest of the Municipality and the public in an adverse position or investments; or such area of activity cannot be attractive within reasonable cost or will result in an unfavorable economic climate .

CHAPTER V

REGISTRATION OF ENTERPRISES

Section 10. Qualifications of new enterprises. New investors/enterprises who intend to avail of the incentives provided in this ordinance must meet the following qualifications:

a) The prospective investor/enterprises has complied with all the requirements mandated under existing local and national laws and the constitution.

b) That the prospective investor/enterprises’ place of operation or production will be located within the territorial jurisdiction of the Municipality of Miagao. This shall include the opening of any branch within the Municipality of Miagao by an enterprise conducting business outside of the Municipality.

c) The prospective investor/ enterprise is engage in preferred areas of investment as herein defined.

d) The actual investment is at least One Million Pesos (P1,000,000.00]; Provided, that the amount of investment shall be based on the total project cost stated in the investor’s study submitted to and approved by the Board .

e) The new investor / enterprise will provide labor and employment to bonafide residents of the Municipality of Miagao, numbering not less than:

2 for investment worth P1 Million but less than 5 million

5 for investment worth P 5 Million but less than 10 Million

10 for investment worth P 10 Million but less than 20 Million

15 for investment worth 20 Million but less than 30 Million

20 for investment worth 30 Million but less than 40 Million

25 for investment worth 40 Million and above

Provided that enterprises/industries using state-of-the-art modern technology/equipment requiring specialized training or less manpower shall be exempted from this requirement.

Section 11. Qualifications of an existing investment/enterprises. An existing investor/enterprise may avail of the incentives under this ordinance, provided, that it meets the following qualifications :

a) The investor/enterprise must have complied with all the requirements mandated under existing local and national laws and the constitution.

b) The investor/enterprise must engage in activities mentioned in the investment priorities plan or in other preferred areas of investment specified in this ordinance .

c) That the existing investor/enterprise whose place of operation is already located within the territorial jurisdiction of the Municipality of Miagao, will expand its existing production capacity or construct new buildings and other civil works for the installation of new machinery and equipment or improvements thereof which will result in an increase in production capacity.

d) That the existing investor/enterprise will provide labor and employment to bonafide residents of the Municipality of Miagao, numbering not less than:

2 for investment worth P1 Million but less than 5 million

5 for investment worth P 5 Million but less than 10 Million

10 for investment worth P 10 Million but less than 20 Million

15 for investment worth 20 Million but less than 30 Million

20 for investment worth 30 Million but less than 40 Million

25 for investment worth 40 Million and above

Provided that enterprises/industries using state-of-the-art modern technology/equipment requiring specialized training or less manpower shall be exempted from this requirement.]

Section 12. Application Requirements. Qualified investor/enterprise shall file an application for registration with the Board within sixty (60) days from the approval of this ordinance. Thereafter, new or existing investors/enterprises qualified under this ordinance shall file their application within sixty (60) days from qualifying for the incentives provided herein. A qualified investor/enterprise shall be considered to have waived its privilege to avail of the incentives provided in this ordinance if no such application is received within the specified period.

a) The applicant shall file three (3) copies of completed application form to be provided by the Board in accordance with the provisions of this ordinance, which shall be accompanied by the following:

A non-refundable filing fee in the following amounts:

P 1,000 for investment worth P1 Million but less than 5 million

P 2,000 for investment worth P 5 Million but less than 10 Million

P 5,000 for investment worth P 10 Million but less than 20 Million

P 10,000 for investment worth 20 Million but less than 30 Million

P 15,000 for investment worth 30 Million but less than 40 Million

P 25,000 for investment worth 40 Million and above

b) A copy of the complete project study of the proposed investment showing that the project is economically, technically, and financially feasible and viable;

c) A certified true copy of applicant’s certificate of registration with the Securities and Exchange Commission, the Board of Investments, Cooperative Development Authority or the Department of Trade and Industry, as the case may be; and

d) A resolution of the applicant’s board of directors or trustees authorizing the application.

Section 13. Approval and Registration Procedures. The Board is authorized to facilitate actions on applications filed within the prescribed criteria for the evaluation of several applications filed in one preferred area; devise standard form for use of applicants; Provided, that the Board shall act upon every applications within thirty (30) days upon receipt thereof, provided, that all requirements are complete.

Section 14. Certificate of Registration. A registered enterprise under this ordinance shall be issued a certificate of registration with the signature of its chairman and/or such other officer of the Board as it may empower and designate for the purpose. The certificate of registration shall be in such form and style as the Board may determine.

CHAPTER VI

RIGHTS AND PRIVILEGES

Section 15. Rights and privileges guaranteed by the Municipal Government. All investors and registered enterprises are entitled to the rights and guarantees provided by law and the constitutions. In addition to such rights and guarantees, and in order to enhance investors confidence in the incentives program, the Municipal Government of Miagao, through Miagao Investment Incentives Board, shall:

a) Provide a concise and comprehensive information to prospective investors on the economic priorities of the Municipal Government, including target investment areas and the general conditions applicable to incoming direct investments;

b) Communicate investment evaluation criteria and procedures to enhance transparency in the process of granting government incentives;

c) Take the fullest possible account of the need of the investors for stability, growth and profit in their operations in the formulation or modification of policies and ordinances that affect investment;

d) Not interfere or modify arrangements with the investors after the details of the implementation of an investment project has been accepted and approved, and the ownership and management structure of the enterprises have been established unless the law provides otherwise;

e) Avoid undue distortion or competition between or among enterprises operating within its territorial jurisdiction, whether domestic or foreign, when granting any special exemptions or incentives aimed at encouraging investments in the identified target areas;

CHAPTER VII

INCENTIVES TO REGISTERED ENTERPRISES

Section 16. Period of Availment. Unless otherwise provided herein, a registered enterprise shall enjoy the fiscal incentives provided herein for a fixed period corresponding to the actual amount of investment put up by the investor/enterprise under the following brackets

INVESTMENT INCENTIVE PERIOD

1 Million Pesos but less than P 5 Million – – – – – – – – – – -Two Years

5 Million Pesos but less than P20 Million – – – – – – – – -Three Years

20 Million Pesos but less than P40 Million – – – – – – – – Four Years

40 Million Pesos and above – – – – – – – – – – – – – – – – – – – – Five Years

Section 17. Fiscal Incentives. In addition to the incentives provided by law a registered enterprise under this ordinance shall enjoy the following incentives starting from the date of the start of actual commercial operation.

(1) Exemption from local licenses, fees, and dues. A registered enterprise under this ordinance shall be fully exempt from the mayor’s permit fees within the incentive period wherein it qualified, building permit fees, and other kind of local license, fees and dues, except for regulatory fees, such as:

a) Medical Certificate Fee

b) Sanitary Permit Fee

c) Garbage Collection Fee

d) Fire Inspection Fee

(2) Reduction of Business Tax. Registered enterprises subject to the period of availment under Section 16, shall be entitled to reduced business taxes based on gross sales or receipts earned or realized during the proceeding calendar year .

YEAR REDUCTION

First Year 100 % of Gross Sales/Receipts

Second Year 75 % of Gross Sales/Receipts

Third Year 50 % of Gross Sales/Receipts

Fourth Year 0 % of Gross Sales/Receipts

Fourth Year 25% of Gross Sales/Receipts

Fifth Year 10 % of Gross Sales/Receipts

Sixth Year 0% of Gross Sales/Receipts

Section 18. Appropriation. To defray the expenses necessary to or incidental to the implementation of the provisions of this ordinance, an initial funding shall be appropriated from the 20% Development Fund of the Municipal Government. Thereafter, the Municipal Government shall provide an appropriation annually, based on a budget presented by the Board, for the necessary funding requirements for the continued implementation of the provisions of this ordinance, subject to the usual government accounting and auditing rules and regulations.

CHAPTER VIII

FINAL PROVISIONS

Section 19. Interpretation. All doubts concerning the benefits and incentives granted to enterprises and investors by this ordinance shall be resolved in favor of the Municipality of Miagao.

Section 20. Tax Credits. All those qualified to avail of the benefits of this ordinance and who has paid the necessary taxes, may avail the tax credits for taxes due to the Municipality of Miagao.

Section 21. Judicial Relief. All orders or decisions of the Municipal Government in cases involving the provisions of this ordinance shall immediately be executory. No appeal from the order of decision of the Municipal Government by the party adversely affected shall stay such order or decision.

Section 22. Separability Clause. The provisions of this ordinance are declared separable .The invalidity of other provisions or of one or more provisions shall not affect the validity of other provisions thereof.

Section 23. Repealing Clause. All ordinances, executive orders and rules and regulations inconsistent with the provisions of this ordinance are hereby repealed or modified accordingly.

Section 24. Effectivity. This ordinance shall take effect fifteen (15) days after its posting in at least three (3) conspicuous places within the Municipality.