- Package of tax incentives mulled
- Includes calibrated tax incentives
By Ivy Tejano
DAVAO CITY – The City Government of Davao will implement an expanded package of tax incentives to encourage new investments and strengthen the city’s overall business climate.
Councilor Myrna Dalodo-Ortiz, chairperson of the Committee on Trade, Commerce and Industry, said the new measure will take effect on April 28, following growing inquiries from prospective investors interested in establishing businesses in the city.
The Ordinance No. 0148-25, which amends the Davao City Investment Incentive Code, was approved on third and final reading on December 12, 2025.
Ortiz said the ordinance introduces a more competitive set of fiscal incentives and broadens priority investment areas to align with current economic strategies.
“The needs of our city require that the local government be prepared to offer clear and competitive incentives to attract investors who wish to do business in the city,” Ortiz said during the Pulong-Pulong sa Dabawenyos media forum on Tuesday, April 14.
Under the updated code, new investors may avail of a five-year graduated business tax exemption for eligible projects, which includes a 100 percent exemption in the first three years, 60 percent in the fourth year, and 40 percent in the fifth year.
Additional incentives include a three-year exemption from basic real property tax and up to five years of exemption from the Mayor’s permit fees for qualifying projects.
The ordinance also allows the Board to grant an additional one-year incentive for projects that generate significant socio-economic benefits, particularly those located in priority areas or those employing persons with disabilities and members of indigenous communities.
Aside from fiscal incentives, the measure provides non-fiscal support mechanisms, such as streamlined permit processing through priority lanes and assistance with site selection and negotiations involving right-of-way requirements.
The revised investment code also includes the Electric Vehicle sector as a Priority Investment Area, in line with Republic Act No. 11697 or the Electric Vehicle Industry Development Act.
Covered activities include EV manufacturing, charging infrastructure, research and development, and distribution. Registered EV enterprises will likewise benefit from the same graduated tax exemption scheme and additional government facilitation services.
Infrastructure-related investments such as airports, international gateway facilities, and public-private partnership projects are also identified as priority areas.
The updated code further broadens the scope of the logistics sector to cover the entire supply chain, with specific incentives for agri-logistics services and agri-economic zones.
For post-harvest and cold chain development, incentives are offered to facilities such as cold storage, nitrogen freezing, and individual quick-freezing systems.
Tourism-related investments are also being strengthened, with amusement tax exemptions for registered enterprises for up to four years, alongside support for theme parks, retirement villages, convention centers, sports tourism activities, and e-sports events.
Hotels with a Department of Tourism two-star rating or higher are likewise prioritized, in line with the city’s efforts to support expanding international air routes.
Ortiz emphasized that the ordinance reflects the city’s effort to remain competitive despite economic challenges, noting that it is designed to sustain investor confidence and promote long-term economic growth in Davao City.
