Tax incentives pushed for Mindanao investors

The Mindanao business sector is urging the national government to craft a package of incentives for businesses to locate in the island.

Arturo M. Milan, president of the Davao City Chamber of Commerce and Industry, on Wednesday said that there is a need for the government to include in the Comprehensive Tax Reform Program preferential tax incentives for those businesses that are willing to invest in Mindanao.

The national government has sought congressional approval on the second package of the CTRP, this time intended for businesses.

Milan said coming up with these incentives “is a way to encourage investments to come to Mindanao and be extended preferential tax incentives,” as he added that the issue will be brought up during the upcoming Mindanao Business Conference in Tagum City, Davao del Norte next week.

He said Mindanao, with its vast resources, can become the driver for the economic growth of the country because allowing it to be left behind “will hinder the growth of the whole country.”

Milan pointed out that although some local government units have their respective incentives codes, they can only offer fiscal incentives like holidays on real property and business taxes.

“What we want are (holidays) income taxes taxes on importing goods (for starting businesses) and other similar incentives that can be offered,” he said.

On the part of the government, particularly the Mindanao Development Authority (MinDA), there is a need for the national government to increase the budget of the island particularly in addressing its infrastructure inadequacies.

MinDA, said Romeo M. Montenegro, its deputy executive director, has been lobbying before the national government to increase budget for Mindanao by P1.2 trillion within four years on top of its regular budget.

At present, the budget for Mindanao is just about 12% of the national government budget even when both political and business leaders of the island have been pushing for a 30% slice for the island.

Montenegro said the additional fund is necessary to propel the island economically so that it “will be able to catch up with the rest of the country.”

Montenegro said it is “very easy to justify the increase in the budget for Mindanao” because it has exhibited huge growth its gross regional domestic product.

Based on the data from the agency, the share of Mindanao in the gross domestic product between 2013 and 2016 was between 14.8% to 15, and the growth could be had had more resources were invested in the island.

Last year, the agency reported that Mindanao’s gross domestic product went up by 7.1%, way above the 6.5% of the national growth.

Also to be discussed in the conference next week, said Milan would be the call of the local business sector and some government officials to create bodies independent from the Civil Aviation Authority of the Philippines to manage Mindanao airports with potentials to grow like those in the city, and the cities of Cagayan de Oro, General Santos and Zamboanga.

Although a congressional bill has been filed for the creation of the body for the airport in the city, the proposal has been placed in the backburner.

The creation of the management body, which is intended to spur growth in the tourism industry, is part of the Mindanao growth agenda, said Milan.

Establishing independent bodies that will manage the airports will pave the way for initiatives that will help it grow as these will be implemented to attract more airlines to use them.

He added that another issue that the business sector in Mindanao is to ensure that key projects that have been identified for the growth of Mindanao must be pursued.

Posted in Business