Bureau of Local Government Finance Opinion

January 16, 1997 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Joseph A. Jacobson Controller Motorola Phils., Inc. Bormaheco Bldg. Km. 17 West Service Road South Superhighway Paraaque, Metro Manila S i r : This refers to your letter dated January 16, 1997 requesting confirmation that the export sales of Motorola Phils., Inc. (MPI) for its Carmona operations are exempt from the local business tax for a period of six (6) years. It appears that MPI is registered with the Board of Investments (BOI) on December 13, 1993 as a pioneer enterprise. It exports 100% of its product, semiconductor devices. Section 133(g) of the Local Government Code of 1991 (LGC) provides as follows: Sec. 133. Common Limitations on the Taxing Powers of Local Government Units . Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: "(a) . . . ; "(g) Taxes on business enterprises certified to by the Board of Investments as pioneer or non-pioneer for the period of six (6) and four (4) years, respectively, from the date of registration; "xxx xxx xxx." In this connection, this Bureau has expressed a uniform view on previous similar queries concerning the tax exemption of BOI-registered enterprises. For so long as a business enterprise is certified by the BOI as pioneer or non-pioneer, it shall remain exempt from local taxation for a period of six (6) and four (4) years, respectively, from the date of registration. Accordingly, and considering that MPI is a BOI registered pioneer enterprise, said corporation shall be exempt from the payment of local business taxes starting December 13, 1993 to December 12, 1999 or for a period of six (6) years. EDHTAI It bears emphasis, however, that the exemption granted to pioneer and non-pioneer enterprises shall apply only upon presentation of the corresponding BOI-certification. Moreover, said enterprises shall still be liable to pay the Mayor's permit and other regulatory fees or service charges that the local government unit may have imposed under a duly-enacted local tax ordinance, the exemption being applicable to local taxes only. Very truly yours, (SGD.) LORINDA M. CARLOS Executive Director