QuestionsQuestions (BATAS PAMBANSA BLG. 44)
It is titled the Investments Promotion Act for Less Developed Areas and aims to encourage investments and assist in establishing and developing industrial and agricultural projects in less developed areas to generate employment and raise the standard of living.
“Board” refers to the Board of Investments created under Republic Act No. 5186, as amended.
A “Less Developed Area” refers to specific localities appearing in the “Less Developed Areas List” prepared jointly by the Ministry of Industry, the Ministry of Human Settlements, and the National Economic and Development Authority.
It must be located in an identified less developed area and registered with the Board under RA 5186, RA 6135, PD 1159, or BP 44 for incentive availment in industrial and agricultural activities listed in the Board’s priorities plans.
The investor is entitled to an investment allowance (as a deduction from taxable income) up to 30% of taxable income, inclusive of the normal tax allowance under its law of registration, subject to conditions.
(1) Not applicable to mining ventures; (2) investment is made in subscription of shares in the original and/or increased capital stock within 7 years from registration as an enterprise; (3) shares are held for at least 3 years; (4) investment must be registered with the Board and deemed necessary for setting up business or expanding/strengthening or transferring to a less developed area.
The taxpayer loses the benefit; income tax liability must be recomputed and the same plus any additional sum due, with interest, must be paid within 30 days from disposition; a surcharge applies if not paid within the period.
It is entitled to pioneer registered enterprise incentives under its law of registration (and generally exempt from PD 1395 if not otherwise exempt). However, less developed area registered enterprises engaged in non-pioneer activities are not exempt from payment of sales taxes.
Government-owned or controlled financing institutions must liberalize collateral requirements and other lending policies and are directed to favor qualified less developed area registered enterprises. Additionally, loans are exempted from certain collateral requirements provisions of the General Banking Act (Sec. 78) to achieve differential financing cost advantage, subject to Central Bank guidelines.
Other government agencies concerned are directed to render such assistance as may be necessary to carry out the purposes of the Act (i.e., to support industrial/agricultural projects and investments in less developed areas).
(1) low per capita GDP; (2) low level of investments; (3) high rate of unemployment and/or underemployment; and (4) low level of infrastructure development, including accessibility to developed urban centers.
Yes. The total population of areas so listed shall not exceed 20% of the national population.
It must be drawn up within six months from the approval of the Act.
It must be classified or re-classified at least once every three years. A less developed area registered enterprise continues to enjoy its status as such notwithstanding deletion of the area from the list.
Those with total assets worth less than P1,000,000 are exempted from filing, processing, and all other fees of both the Board of Investments and the Securities and Exchange Commission.
The Board may promulgate implementing rules that take effect 30 days after publication in two (2) newspapers of general circulation in the Philippines.
The penal provisions in RA 5186 apply likewise for the violation of any provision of BP 44 or its implementing rules and regulations.
These laws apply, as far as applicable and not inconsistent with BP 44, to enterprises registered under BP 44.
Yes. The repealing clause (Sec. 12) repeals or modifies inconsistent laws/rules. The separability clause (Sec. 13) preserves the remaining provisions if any part is declared invalid.