Comment on the Makati City Investment and Incentives Code of 2014

August 3, 2016 BLGF OPINION NO. 018-2016 CO-LFPS-PPPSD Mr. Vicente T. Sese Officer-in-Charge Twinning Division International Relations Department Makati City SUBJECT : Comment on the Makati City Investment and Incentives Code of 2014 Dear Mr. Sese : This refers to your letter of 26 July 2016 requesting for comment on the Makati City Investment and Incentives Code ("Code") of 2014. The Code aims to create and develop a business-friendly environment that will entice new players to invest and for the existing investors to increase their stakes in the City. After a careful reading of the attached copy of the Code, this Bureau is of the opinion that the Code is in order. However, to further improve on other relevant provisions of the Code, the Office of the Sangguniang Panlungsod may be guided by the attached copy of the "Guidelines on the Formulation of Local Investments and Incentives Code" jointly issued by the Department of the Interior and Local Government (DILG) and the Department of Trade and Industry (DTI) under JMC No. 2011-01, s. 2011. Further, same Body may also be guided by the provisions of Article 282 of the Implementing Rules and Regulations (IRR) implementing Section 192 of the Local Government Code (LGC) of 1991, which provides: "ARTICLE 282. Authority to Grant Tax Exemption Privileges or Incentives. (a) While sanggunians may grant tax exemption, tax incentive, or tax relief, such grant shall not apply to regulatory fees which are levied under the police power of LGUs. Tax exemptions shall be conferred through the issuance of a tax exemption certificate, which shall be non-transferable. (b) x x x (2) On the grant of tax incentives: (i) The tax incentive shall be granted only to new investments in the locality and the ordinance shall prescribe the terms and conditions therefor; ETHIDa (ii) The grant of the tax incentive shall be for a definite period not exceeding one (1) calendar year; (iii) The grant of tax incentives shall be by ordinance passed prior to the first (1st) day of January of any year; and (iv) Any tax incentive granted to a type or kind of business shall apply to all businesses similarly situated." Hoping that this will help clarify matters. Very truly yours, (SGD.) NIO RAYMOND B. ALVINA OIC Executive Director