GUIDELINES FOR THE REGISTRATION AND
ADMINSTRATION OF INCENTIVES UNDER EXECUTIVE
ORDER NO. 226 OF FIRMS PROVIDING COMMUNITY ACCESS

I.          DEFINTION

                        Community Access shall cover activities that will provide facilities for mass-based use of internet/e-commerce.  This shall include internet cafes, kiosks, multipurpose communications telecenters, etc.

II.        COVERAGE UNDER THE YEAR 2001 IPP

                        Community access will fall under ICT Support Activities of the Information Technology Services.

III.       REGISTRATION UNDER E.O. 226

A.                 QUALIFICATONS

1.         To be eligible for non-pioneer status, a project should have the following qualifications:

·        It will utilize a network that provides reliability of access

·        There is a roll-out plan covering various areas of the country

·        It will support the programs of the Local Government Units (LGUs) aimed at  complying with On-line

·        It will assist/partner with schools/educational institutions in promoting E-commerce and in augmenting the lack of sufficient computer facilities

2.         To be eligible for pioneer status, a project must comply with all of the following:

            a.         The project cost should be at least P100 million or it must utilize new or untried technology.

            b.         The project should have the following qualifications:

·        It will utilize a network that provides reliability of access

·        There is a roll-out plan covering various areas of access

·        It will support the programs of the Local Government Units (LGUs) aimed at complying with Government On-line

·        It will assist/partner with schools/educational institutions in promoting E-Commerce and in augmenting the lack of sufficient computer facilities.          

            Note:     

                Registered firms shall be monitored on their compliance with the aforementioned criteria during project implementation

·        Projects that fail to comply with minimum conditions set on investments cost and technical requirements for pioneer status shall be downgraded to non-pioneer status.

·        Projects that fail to comply with the minimum conditions set on technical requirements for non-pioneer status shall be required to refund the incentives availed of.

B.                 ADMINISTRATION OF INCENTIVES  

1.         All registered enterprises engaged  in providing Community Access shall be entitled to the following incentives:

            a.         Income Tax Holiday

                        Art. 39 (a) of the Omnibus Investments Code of 1987 fully exempts a new registered firm from income taxes levied by the National Government for a period of six (6) years from commercial operation of pioneer enterprises and four (4) years for non-pioneer, with possible extension of two (2) years but not to exceed eight (8) years subject to compline with the guidelines for the grant of bonus year. 

                        An expanding activity will be eligible to three (3) years income tax holiday.

            b.         Employment of Foreign Nationals under Article 39 (h) of E.O. 226

                        The provisions of the Revised Joint Circular of the Department of Tourism, Department of Labor and Employment and the Bureau of Immigration and Deportation on the foreign nationals in the functions specified hereto, however, shall be strictly observed.

c.                   Additional Deduction on Labor Expense

d.                  Unrestricted Use of Consigned Equipment

                        2.         If the registered project will provide access to unserved municipalities as identified by the Department of Transportation and Communication (DOTC), the firm shall be granted pioneer incentives, i.e. Income Tax Holiday (ITH) for six (6) years.

C.                 MONITORING AND SUPERVISION

                                    In accordance with the provisions of E.O. 226, registered enterprises shall strictly adhere to the general and specific terms and conditions of registration.  Non-compliance shall be subject to fines and penalties in accordance with Rule XXVIII of E.O. 226 Implementing Rules and Regulations.