Comprehensive Investment Incentives Ordinance of the Municipality of Puerto Galera

September 8, 2010 Excerpt from the Journal of the 10th Regular Session of the Sangguniang Bayan of Puerto Galera, Oriental Mindoro Held on September 08, 2010 at the Sanggunian Session Hall. PUERTO GALERA MUNICIPAL ORDINANCE NO. 008-10 COMPREHENSIVE INVESTMENT INCENTIVES ORDINANCE OF THE MUNICIPALITY OF PUERTO GALERA 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 PUERTO GALERA 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 PUERTO GALERA, 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 PUERTO GALERA." SECTION 2. Declaration of Policies. a. It is the responsibility of the Municipality of PUERTO GALERA to attract, promote and welcome private Filipino and foreign investments in industry, trade, tourism, scientific and technological transfers, agriculture 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. b. Unless otherwise provided herein, the tax exemption and incentives shall take effect for a period of not more than four (4) years from the start of actual commercial operation of new or expanded enterprises as provided herein. c. 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. d. All registered and qualified persons or entities, both foreign and local, who are investors within the territorial jurisdiction of the Municipality of PUERTO GALERA, 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 Puerto Galera Investment Incentives Board (PGIIB) to carry out the provisions of this ordinance. SECTION 4. Composition of the Board . The Board shall be composed of the following: a. Chairman Municipal Mayor b. Vice Chairman Municipal Vice Mayor c. Members: 1. Chairman, SB Committee on Tourism, Trade and Investment; 2. Municipal Treasurer or his representative, who shall act as the Secretary of the Board; 3. Municipal Planning and Development Officer or his representative; 4. Municipal Assessor or his representative; 5. Four (4) members from the PRIVATE SECTOR to be appointed by the Municipal Mayor. 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; CAIHTE 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 Puerto Galera, 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 Puerto Galera Investment Incentives Board (PGIIB) created under this ordinance. b. Municipality shall mean the Municipality of Puerto Galera 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 Puerto Galera. 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 Puerto Galera in 2010. 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 Puerto Galera. 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 of residence or registration in the case of foreigners. 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 the following: a. Labor generating or labor intensive enterprises; b. Enterprises established in less developed areas; c. Tourism-oriented industries; d. Fast, non-wooden hull Ferry Services and RORO vessels; e. Commercial buildings (new or expansion); f. Information Technology enterprises. 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 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. That the prospective investor/enterprises' place of operation or production will be located within the territorial jurisdiction of the Municipality of Puerto Galera. This shall include the opening of any branch within the Municipality of Puerto Galera by an enterprise conducting business outside of the Municipality; b. The prospective investor/enterprise is engage in preferred areas of investment as herein defined; c. The actual investment is at least One Million Pesos (P1,000,000.00); d. The new investor/enterprise will provide labor and employment to bonafide residents of the Municipality of PUERTO GALERA, numbering not less than: 5 for investment worth P1 Million but less than 5 million 10 for investment worth P5 Million but less than 10 Million 15 for investment worth P10 Million but less than 20 Million 20 for investment worth 20 Million but less than 30 Million 25 for investment worth 30 Million but less than 40 Million 30 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 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 be accredited by the Puerto Galera Tourism Council. 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 Puerto Galera, 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 Puerto Galera, numbering not less than: 2 for investment worth P1 Million but less than 5 million 5 for investment worth P5 Million but less than 10 Million 10 for investment worth P10 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 DETACa 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. A non-refundable filing fee is hereby imposed in the following amounts: P1,000 for investment worth P1 Million but less than 5 million P2,000 for investment worth P5 Million but less than 10 Million P5,000 for investment worth P10 Million but less than 20 Million P10,000 for investment worth 20 Million but less than 30 Million P15,000 for investment worth 30 Million but less than 40 Million P25,000 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 Constitution. In addition to such rights and guarantees, and in order to enhance investors' confidence in the incentives program, the Municipal Government of Puerto Galera, through the Puerto Galera Investment Incentives Board, shall: a. Provide 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 P5 Million One Year 5 Million Pesos but less than P20 Million Two Years 20 Million Pesos but less than P40 Million Three Years 40 Million Pesos and above Four 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. a. 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 and other kind of local license, fees and dues, except for regulatory fees, such as: 1. Medical Certificate Fee 2. Sanitary Permit Fee 3. Garbage Collection Fee 4. Fire Inspection Fee 5. Barangay Clearance Fee b. 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 25% of Gross Sales/Receipts CHAPTER VIII Final Provisions SECTION 18. 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 PUERTO GALERA. SECTION 19. Tax Credits . All those qualified to avail of the benefits of this ordinance and who has paid the necessary taxes, may avail of the tax credits for taxes due to the Municipality of PUERTO GALERA. aDSIHc SECTION 20. 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 21. 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 22. Repealing Clause . All ordinances, executive orders and rules and regulations inconsistent with the provisions of this ordinance are hereby repealed or modified accordingly. SECTION 23. Effectivity . This ordinance shall take effect fifteen (15) days after its posting in at least three (3) conspicuous places within the Municipality. Author : Hon. Emmanuel L. Lineses Co-Authors : Hon. Melchor J. Arago, Hon. Mark Garry V. Evangelista, Hon. Marlon Lopez, Hon. Edwin Axalan, and Hon. Edwin Suzara Voted in-favor - All Voted not-in-favor - None Abstain - None DATE ENACTED: SEPTEMBER 8, 2010. CERTIFIED CORRECT: (SGD.) ALLAN KRISTIAN A. ALDOVER Secretary to the Sangguniang Bayan ATTESTED: (SGD.) MARLON L. LOPEZ Municipal Councilor/Temporary Presiding Officer APPROVED: (SGD.) HUBBERT CHRISTOPHER A. DOLOR, M.D., M.P.A. Municipal Mayor Date: __________