Makati City subway project gets income tax holiday, other tax incentives: DOF

ABS-CBN News

Posted at Nov 08 2021 01:28 PM

The scale model of the Makati Subway Project unveiled at the Makati City Hall on December 12, 2018. George Calvelo, ABS-CBN News/File
The scale model of the Makati Subway Project unveiled at the Makati City Hall on December 12, 2018. George Calvelo, ABS-CBN News/File

MANILA - The Department of Finance said Monday the Fiscal Incentives Review Board (FIRB) approved the grant of a tax incentives package for the rail operations of the Makati City subway.

In a statement, the DOF said majority of the 5-member FIRB board chaired by Finance Secretary Carlos Dominguez III approved last month the grant of 4 years of income tax holiday, followed by 5 years of deductions and duty exemption on importation for construction, operation, management and maintenance of the project. 

The P81-billion subway project is expected to begin commercial operations in 2026.

Dominguez clarified that incentives are confined to rail operation and would not apply to other business activities generated from the operations such as lease of retail areas and advertising.

"In deciding to approve the project, the FIRB took into consideration the projected increase in economic productivity of P24.4 billion per year once the subway system becomes operational in 2026," the DOF said.

"This will be monitored, along with the other projected benefits, in accordance with the principle of granting incentives based on merit or performance embodied in the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law," it added.
 
The productivity and other benefits "offset" the economic costs in the decision such as foregone revenues, Trade Secretary and FIRB co-chair Ramon Lopez said. 

Meanwhile, Dominguez urged stakeholders and the government to "work out" details on how to connect the said project to the Metro Manila Subway project.

The 10-station rail system spans 10 kilometers with stops in key points around Makati.