QC offering tax breaks to investors hiring locals
In a bid to boost revenues and generate more jobs for residents, the Quezon City government will be offering incentives to big businesses, including three- to four-year tax holidays and other special perks.
These and other benefits are part of the “Quezon City Economic Development Incentives Code of 2013” approved on July 18 by Mayor Herbert Bautista who wants to see more foreign and domestic medium and large enterprises (MLEs) do business in the city.
To qualify, investors should comply with local business requirements. In addition, 15 percent of the rank-and-file workers of medium enterprises (businesses with total assets of P15 million to P100 million) should be residents of the city. For large enterprises (businesses with assets of over P100 million), city residents should comprise 20 percent of their workforce.
Among the fiscal incentives being offered to MLEs are tax holidays on real property; special deductions on gross income in computing the base of business taxes (P5 million for medium enterprises and P10 million for large enterprises); and exemptions from amusement taxes and fees for the transfer of real property ownership.
Nonfiscal benefits, on the other hand, include the assignment by the city’s economic investment promotions office of an account officer for the investor’s business operation requirements; transparency in the process of registering and qualifying for the incentives as well as an assurance from the city government that it will not interfere in the company’s internal operations; facilitating business registration and the hiring of qualified foreign workers for the company’s operations provided there is no Filipino qualified or available for the job.
The incentives will be good for three to four years provided all the land, buildings and equipment taxed are “actually, directly and exclusively” used by the MLEs.
In addition, the exemption of medium enterprises from the tax holiday on real property and business taxes will be extended by one more year if at least 30 percent of their rank-and-file employees are city residents.
If the figure goes up to 60 percent, the extension covers two more years but if their workers are all Quezon City residents, they will be given an additional three years.
For large enterprises, the tax holiday on real property and business taxes will be extended by one year if at least 40 percent of their employees are city residents. To raise the coverage to two years, Quezon City residents should comprise 70 percent of their regular workers. Should the figure go up to 100 percent, they will get an additional three years.
The ordinance also provides tax credits for the purchase of raw materials “actually, directly and exclusively used in production or operation” where the total amount paid will be deducted from the MLEs’ business taxes. Jeannette I. Andrade
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