Republic of the Philippines
Province of Lanao del Norte
BAYAN NG KAPATAGAN
OFFICE OF THE SECRETARY TO THE SANGGUNIAN
Excerpt from the minutes of the Special Session of the Sanggunian held on December 17, 2014 , SB Session Hall, 9:00 a.m.
Hon. Perlito B. Gonzaga Municipal Vice Mayor – Presiding Chairman
Hon. Guilllermo B. Bandiala SB Member
Hon. Ann Marie Go Fung do
Hon. Liczar O. Basinillo do
Hon. Claire Joy V. Te do
Hon. Jhonny Paul H. Lagura do
Hon. Allan C. Tabaquero do
Hon. Jegger C. Te do
Hon. Walter P. Lantaca do
Hon. Barry Y. Baguio ABC President
MUNICIPAL ORDINANCE NO. 53, S-2014
AN ORDINANCE KNOWN AS THE KAPATAGAN INVESTMENT INCENTIVE CODE OF 2014
WHEREAS, the local government unit of Kapatagan in consonance with its Municipal Development Plan
Welcomes and encourages the domestic and foreign investors to establish or expand enterprises that would utilize substantial amount of labor, raw materials and natural resources in the municipality:
WHEREAS, there is a recognized need and a definite advantage to promote and develop the agriculture and economic industries in the community in order to provide employment and livelihood opportunities, and further improve the quality and standard of living of its residents;
WHEREAS, the local government unit of Kapatagan encourages the investors to participate in corporate-social responsibilities by granting them tax incentives;
WHEREAS, the tax incentives are attractive solutions to the problems encountered by investors and aim to create a friendlier and more favorable business climate to the Municipality of Kapatagan;
WHEREAS, the pursuant to Sec. 192 of the Local Government Code of 1991, the Municipal Government may, through an ordinance duly approved grant tax exemptions, incentives or reliefs under such terms and conditions as the municipal government may deem necessary;
WHEREAS, there shall be formed a focal body composed of investors to analyze and formulate solutions to the problems encountered by the investors;
WHEREAS, after public hearing and upon motion of Hon. Ann Marie Go Fung , unanimously seconded ;
BE IT ORDAINED, AS IT IS HEREBY ORDAINED by the sangguniang bayan in a session duly assembled for the purpose to enact :
Title, Declaration of Policy and Purpose
Section I. Short Title– This act shall be known as the “ KAPATAGAN INVESTMENT INCENTIVE CODE OF 2014”.
Section 2. Declaration of Policy– it is hereby declared a policy of the Municipal Government to attract investors, both local and foreign to invest in Kapatagan by providing incentives in order to increase profitability of their projects and their competitiveness with other localities. It is also a means to further development, raise local income and generate employment for the people of Kapatagan, Lanao del Norte .
Section 3. Purpose, Intent and Objectives– The purpose, intent and objectives of this act;
- To transform Kapatagan into a highly developed agricultural and industrial-led economy in the Province of Lanao del Norte and Region X.
- To promote the flow of investors, both foreign and local in Kapatagan which would generate employment opportunities and provide backward and forward linkage among micro, small medium and large businesses or industries in the municipality, province and the countryside;
- To promote sustainable development without jeopardizing the environment and welfare of the next generation;
- To lay down the legal framework and mechanism of integrating the investment/ incentives laws of the national government to the local development initiative;
- To increase profitability of putting business in Kapatagan;
- To make Kapatagan a very competitive municipality for investment development in terms of adequate human a resources, accessible basic services for employees –employer needs, low crime incidence and extensive government support.
Definition of Terms
Section 1. Definition of Terms– for purposes of this Act, the following terms and definitions shall apply:
- “BOI” refers to the Board of Investment under Executive Order No. 226 or the Omnibus Investment Code.
- “ BOARD” refers to the Local Investment Board.
- “ Capitalization” refers to the total project cost.
- “ Centre” refers to “One- Stop-Shop” established in the municipality to facilitate registration of business.
- “ Executive Order No. 226” refers to the Omnibus Investment Code of 1987.
- “Existing Firms” refers to those firms whose places of operation are presently located in Kapatagan.
- “Fiscal Incentives” are annual incentives granted through the recommendation of the Board in terms of monetary values.
- “Firms under Diversification” refers to existing firms that are investing in other products or services.
- “Foreign Investment” refers to the equity investment owned by a non-Philippine national.
- “LCE” refers to Local Chief Executive of the Municipal Mayor
- “ Local Investment Act” refers to the Kapatagan Investment Incentives Act of 2014 created under this law
- “ National Laws” refers to Executive Order No. 226,RA7844,RA 7916 and RA 7718, among others
- “Non Fiscal Incentives” refers to the annual incentives other than monetary values that may be enjoyed by a business based on the recommendation of the Board.
- “ Preferred Areas of Investment” refers to priority investments as provided in the List of Preferred Areas of Investments (LOPAI) identified by the Board in consultation with other sectors.
- “ Project Study” refers to the profile of the project which presents its marketing, technical, financial, and socio- economic aspects.
- “RA 7718” refers to the build- operation-transfer law or BOT law which was enacted on May 5, 1994
- “RA 7916” refers to the Special Economic Zone of 1995.
- “RA 78844” refers to the Export Development Act of 1991.
- “RA 7160” refers 7160” refers to any individual, partnership, cooperative, corporation or other entity incorporated and/ or registered with the board of investment (BOI) or any governing body.
The Local Investment Board/ Council
Section 1. Local Investment Board/ Council– There shall be created a Local Investment Board/ Council (LIB/C) for the purpose of overseeing the implementation of this Local Investment Incentive Act.
Section 2. Composition of the Local Investment Board/ Council- the Board/ Council shall be composed of the following:
- Board Chairperson- one Presiding Officer from the business sector.
- Co- Chairperson-One Co- presiding officer (appointed by the LCE):
- Vice- Chairperson- one representative from the business sector:
- Secretary-one representative from the business sector.
- Board( Five((5) representatives from any of the following business sector)
- Real Estate Development Group
- Manufacturing group
- Educational Business Group
- Recreational and Tourism Business Group
- Micro- Small-Medium Business Group
- Food Services or Utilities Related Business
- Agricultural Production Group
- Advisers: Provincial DTI, Provincial DILG, President of PCCI Chapter, CPZA Administrator and one representative each from the BPLO and SB Committee Chairperson on Economic Development.
Section 3. Meeting of the Board Council- the board/ council shall meet at least once every quarter of each year and the Chairperson may convene the Council anytime it is deemed necessary.
Section 4- Powers and Duties of the Local Investment Board/ Council– the board /council shall be responsible for the regulation and promotion of investment in the municipality. The majority members of the LIB/ C shall constitute a quorum for it to exercise its powers and perform its duties which shall be as follows:
- Prepare the list of preferred areas of investment in consultation with the public and private sectors;
- Promulgate the implementing rules and regulations of this Act as may be necessary to implement its provisions;
- Endorse the enjoyment of incentives benefits of qualified investors to the Sanggunian for that purpose:
- Require refund of incentives enjoyed by the investors for violating the provisions of this Act;
- Formulate new fiscal or non- fiscal incentives other than those stated in this Code.
- Formulate amendments to any provision of this code subject for approval of Sangguniang Bayan
Section 5. Term of office– term of office shall take effect immediately upon appointment of the incumbent Mayor for three (3) years, Co- terminus with the term of appointing authority. Members shall elect among themselves the chairperson, vice chairperson, secretary and board of director.
In case of vacancies, the Chairperson will appoint for the vacant position with consideration on balance/ equal representation of the business group.
The appointed member fills the vacant position and serves for the remaining years of the 3- year term
Scope of Application and Coverage
Section 1. Coverage . Investment/ Business eligible for the incentives are those included in the following list of preferred areas:
- Marketing sales of vacant industries lots/estate/ subdivision.
- Manufacturing industries related to semi-conductors, garments, food processing and automotive industry.
- Registered businesses operating as Micro-Small-Medium Enterprise in approved MSME subdivisions.
- Business process outsourcing related business in IT Park , Ecozones and designated zones.
- Engineering and ICT Tertiary Educational Institutions recognized by CHED.
- Shopping malls, hotels, condotel, recreational/ eco theme parks.
- Sports- related business operations for public use like sport arenas, gymnasiums, rinks, velodromes, race tracks, ball parks, Olympic size swimming pools.
- Privately owned transportation terminals serving inter town or regional transport services.
- Agricultural millings
- Business- Producing and selling One- Town-One Product (OTOP) of Kapatagan.
- Development of socialized housing projects wherein fifty percent (50%) of the beneficiaries are legitimate residents of the municipality.
- Manufacturing of environmental pollution devices and equipments.
- Operation of material recovery facilities (MRF) and/ or Sanitary Landfills.
- Housing subdivisions with centralized water treatment for sewage disposal and operational waste segregation facilities.
- All other future preferred areas of investments or areas endorsed by the board/ council and approved by the Sangguniang Bayan.
Section 2. Investors enjoying incentives under the National Laws– Investors enjoying incentives under EO 226, RA7844, RA7916 and RA 7718 are also eligible for incentives under this code subject to terms and condition as prescribed in the preceding section.
Section 3. Investors under Preferred Areas of Investments– Investors engaged in business identified by the board/ council as preferred areas of investment are eligible for incentives under this act provided they comply in any of the following conditions:
- The new investment must have a capitalization of at least three million pesos (Php 3,000,000.00) but not more than ten million pesos (Php 10,000,000.00) in case of small size enterprise; at least ten million pesos, but not more than forty million pesos in case of medium size enterprise; and more than forty million pesos for large enterprise. The amount of capitalization shall be based and more than forty million pesos for large enterprise. The amount of capitalization shall be based on the total cost in the investors project study submitted and approved by the board/ council.
- The new enterprise shall employ bonafide residents of Kapatagan( certified by the local barangay council) as regular workers no less than 10 persons in case of small size enterprise, at least 20 persons in case of medium size enterprise and atleast 100 persons in case of large size industry.
- Twenty percent (20%) of the man power requirements are hired through PESO of the municipality.
- The project size occupies 200 houses or more for housing projects for the offsite developments and 100 houses for on- site developments.
- The environment facility caters to the needs of the residents of the municipality and complies with the local and national environmental standards.
- The operators of agricultural support facilities like rice/ corn mills, dryers, aquatic ponds and lessors of processing equipment have their business offices in Kapatagan.
Section 4. Investment under Expansion and Diversification– investors who are expanding their existing businesses and diversifying to the areas identified to be preferred areas of investment are eligible for incentives under this Act, provided that:
- The new investment must have capitalization of at least three million pesos but not more than ten million pesos but not more than forty pesos in case of medium size enterprise; and more than forty million pesos for large enterprise. The amount of capitalization shall be based on the total project cost in the investors project submitted to and approved by the council.
- The new enterprise shall employ regular workers no less than 10 persons in case of small size enterprise and at least 100 persons in case of large size enterprise industry.
Fiscal and Non Fiscal Incentives
Section 1. Incentives given to investors enjoying incentives under the National Laws– Investors enjoying incentives under National laws, such as but not limited to EO 226, RA 7916 and RA7718, shall be exempted from the following:
- Payment of business fees, business sales taxes, and other fees and charges imposed by existing Municipal ordinance for a period of 4 years from start of commercial operation.
- Payment of Basic Real Property Tax and Building Permit Fees imposed by the municipality for a period of 3 years from the date of approved registration with the BOI.
Section 2. Incentives Given to new investors under preferred area of investment –Investors eligible under Section 3 of Article IV of this code shall exempted from the following:
- Payment of business fees, business sales taxes and other fees and charge imposed by existing Municipal Ordinance for a period of 4 years from start of commercial operation:
- Payment of basic real property tax and building permit fees imposed by municipality for a period of 2 years from the date of approval of registration by the board/ council
- Job Placement Assistance thru PESO:
- Investment Promotion thru ICT, Sponsorship, Exhibits, Trade Missions:
- Technical Assistance in project Study;
- Human Resource Development Assistance
Section 3. Incentives Given to investors under the New expansion and Diversification– An existing business who is expanding and/ or diversifying to preferred areas of investment as determined by board/ council shall be exempted from the payment of the following:
- Payment of business fees, building permit fees, business sales taxes and other fees and charges imposed by existing Municipal ordinance which are attributable to the expansion or diversification for a period of 3 years beginning the date of commercial operation as determined by the local government.
- Payment of the Municipal Share to Basic Real Property Tax (excluding special education fund) and imposed by the municipality for a period of 5 years from the date of business operation or determined from the date of issuance of certificate of building completion whichever comes first.
Section 1. Tax credit to persons Donating Property to the Municipality-persons donating land or money to the municipality for the purpose of road right of way, squatter relocation and/ or housing projects, constructing community center for public use shall be entitled to tax credit which can be used by the taxpayer to pay his obligations when tax due comes effective.
Section 2. Tax Credit to persons donating second hand equipment and appliances are not covered by tax credits.
Section 3. Basis of Tax Credit– the amount of tax credit shall correspond to fifty percent(50%) of the assessed value of the property at the time the donation is executed as jointly certified by the office of the Municipal Assessor, Municipal Engineer and Municipal Treasure or fifty percent(50%) of the money donated to the municipal government.
Requirements for Availment of Tax Incentives
Any person may avail of the tax credit shall correspond upon approval of the Local Investment Board/ Council and consequently by the Sangguniang Bayan through a resolution approved by a majority vote.
Section 1. Requirements for firms enjoying incentives under national law– for firms to enjoy the incentives under this code , they must comply with the following:
- Submit the certificate of registration issued by the concerned national agencies;
- The investors place of business or operation must be located in Kapatagan:
- The investment has no delinquency with the national agencies;
Section 2. Requirements for New Business– for firms to enjoy the incentives under this code , they must comply with the following:
- The new business shall have complied with Section 3 of Article 4 of this code ;
- The new investment must be among the approved preferred areas of investment;
- Must have complied with all requirements of local and national agencies.
Section3. Requirements for expanding and diversifying establishments– for firms to enjoy the incentives under this code , they must comply with the following:
- The existing firms have been doing businesses in the municipality of Kapatagan; if not, intends to locate its expansion and diversification to Kapatagan
- The expansion of diversification must be among the approved preferred areas of investments;
- The expansion of diversification shall have complied with the requirements of Section12 of this Act
Section 1. One – Stop – Shop . The LIB/C shall coordinate with the established “one-stop-shop” center for the purpose of facilitating the registration and issuance of business permit to the enterprise covered under this code .
Section 1. Allocation of funds . The Municipality shall appropriate the funding requirements which are necessary for the implementation of the provisions of this code based on the budget presented by the board/ council.
Section 1. Availment of Privilege to those already enjoying privilege from national laws. Business establishments already enjoying the benefits under the existing National laws prior to the enactment of this code may apply to the local investment board/ council for tax incentive availment, provided the business establishment is in continuous operation for the next five (5) years or more from the date if its application for incentives availment.
Section 1. Penal Clause-any violation of the provisions of this code Rules and Regulations, shall be ground for the cancellation of the registration of the business, withdraw of all incentives granted under this code and refund of the fiscal incentives granted.
Section 2. Separability Clause-the provisions of this act are hereby declared separable. The invalidity of one or more provisions shall not affect the validity of the other provisions thereof.
Section 3. Repealing Clause– All Municipal ordinances, Resolutions, Executive Orders and Rules or Regulations inconsistent with the provisions of this Act are hereby modified , annulled or repealed.
Section 4. Effectivity– this code shall take effect immediately after approval.
1st and 2nd reading : November 5, 2014
3rd and final reading : December 17, 2014
I hereby certify to the correctness of the foregoing resolution.
JOSELITO C. DELORIA
Secretary to the Sanggunian
Verified by :
Hon. ANN MARIE GO FUNG
SB Member/ Movant
Attested by :
Hon. PERLITO B. GONZAGA
Municipal Vice Mayor/Presiding Chairman
Approved by His Honor, the Municipal Mayor :
Atty. BENJIE YU BAGUIO
With our conformity :
Hon. Guilllermo B. Bandiala SB Member ___________________
Hon. Liczar O. Basinillo do ___________________
Hon. Claire Joy V. Te do ___________________
Hon. Jhonny Paul H. Lagura do ___________________
Hon. Allan C. Tabaquero do ___________________
Hon. Jegger C. Te do ___________________
Hon. Walter P. Lantaca do __________________
Hon. Barry Y. Baguio ABC President ___________________