THE LOCAL government will adopt an expanded business tax exemption for new projects or new investors to strengthen the city’s investment climate.
“We will expect full implementation of this ordinance soon on April 28, 2026,” said Councilor Myrna Dalodo-Ortiz, committee chair on trade, commerce and industry, noting various investors inquiring to do business in the city.
Ordinance No. 0148-25, further amending the Davao City Investment Incentive Code, was officially approved on third and final reading on Dec. 12, 2025, providing a more competitive fiscal package and expanded investment areas.
Fiscal packages that new investors can avail of include a five-year graduated business tax exemption for new projects.
New investors can now enjoy 100% exemption for the first three years, 60% in the fourth, and 40% in the fifth year.
Additionally, new projects will receive a three-year exemption from basic Real Property Tax and up to five years of exemption from Mayor’s Permit fees.
Ortiz said the ordinance also includes a provision where the Board may grant an additional one-year incentive for projects that have a significant positive impact on our Priority Areas or employ local PWDs and indigenous people.
For non-fiscal support, the Code guarantees airlines and infrastructure developers, such as express/priority lanes for local permits and assistance with site selection and right-of-way negotiations.
On top of the fiscal packages, the inclusion of the EV sector as a Priority Investment Area (PIA) is a “strategic” move to harmonize local investment policies with national government initiatives, specifically the Electric Vehicle Industry Development Act (EVIDA) or Republic Act No. 11697.
“This landmark legislation reflects our proactive stance, as we were already eyeing the transition to Electric Vehicles (EVs) just before the recent global crises to ensure Davao remains a sustainable and globally competitive economic hub,” she said.
Under the new code, the EV industry is prioritized under Eco-Industry, which covers EV manufacturing, charging station components, research and development, and distribution.
Additionally, the establishment of charging or refueling stations is recognized under Infrastructure
To accelerate this shift, registered EV enterprises will enjoy a graduated business tax exemption for five years (100% for the first three years, 60% in the fourth, and 40% in the fifth), alongside a three-year exemption from basic Real Property Tax and additional support such as priority lanes for permits, assistance in site selection, and help in identifying local labor and raw materials.
The new code also explicitly identifies Airports, International Gateway Facilities, and Public-Private Partnership (PPP) Projects as priority investment areas, and expanded the definition of Logistics to include the physical flow of goods from production to consumption, specifically incentivizing Agri-logistics services and Agri-Economic Zones.
In terms of the air cargo business, the city government offers incentives for Modern Post-harvest Facilities, such as Cold Storage, Nitrogen Freezing, and Individual Quick-Freezing (IQF) facilities.
To increase international arrivals, Ortiz said, a four-year exemption from amusement taxes for registered enterprises.
The Code also prioritizes the development of Theme Parks, Retirement Villages, Conventions and Exhibition Centers, and Sports Tourism (including international sporting meets and E-Sports).
These projects, she stressed, along with Hotels (DOT Star Rating 2 and above), are key to filling the seats on the new international routes the city is currently negotiating.
“Though we have an economic crisis, we are finding ways that our Davao City will thrive through this legislation,” Ortiz said.
