Section 4
SEC. 4. Section eighteen of the same Decree is hereby amended by adding three new paragraphs after paragraph (f) thereof and amending paragraph (f) to read as follows: Exemption from Local Taxes and Licenses.—Notwithstanding the provisions of law to the contrary, zone registered enterprises shall, to the extent of their construction, operation or production inside the zone be exempt from the payment of any and all local government imposts, fees, licenses or taxes except real estate taxes which shall be collected by the Municipality responsible for the collection thereof under the provisions of the Real Property Tax Code: Provided, That machineried owned by zone registered enterprises which are actually installed and operated in the Zone for manufacturing, processing or for industrial purposes shall not be subject to the payment of real estate taxes for the first three (3) years of operation of such machineries: Provided, further, That fifty percent of the proceeds of the real estate taxes collected from all real properties located in the Zone and such other areas owned or administered by the Authority shall be remitted to the Authority by the municipality responsible for the collection of such taxes under the provisions of the Real Property Tax Code. All real estate taxes accruing to the Authority as herein provided shall be expended for such community facilities, utilities and/or services as the Board may determine. Deduction for Labor Training Expenses.—A deduction from taxable income of one-half the value of labor training expenses incurred for upgrading the productivity and efficiency of unskilled labor shall be granted to a zone registered enterprise: Provided, That such training program is duly approved by the appropriate government agency or in the absence thereof by the Board: Provided, further, That such deduction shall not exceed ten (10%) percent of the direct labor wage. Deduction for Organizational and Pre-Operating Expenses.—All capitalized organizational and pre-operating expenses attributable to the establishment of a zone registered enterprise may be deducted from its taxable income over a period of not more than ten (10) years beginning with the month the enterprise indicated the desired amortization period at the time of the filing of income tax returns for the first taxable year. For the purpose of this provision, organizational and pre-operating expenses shall include expenses for pre-investment studies, start-up costs, cost of initial recruitment and training and similar expenses. Tax Credit.—Every registered zone enterprise shall enjoy a tax credit equivalent to the sales, compensating and specific taxes and duties on supplies, raw materials and semi-manufacture products used in the manufacture, processing or production of its export products and forming part thereof: Provided, That the tax credit shall accrue to the registered zone enterprise only after the final product has in fact been exported. The tax credit shall be used by the Secretary of Finance, upon presentation of the export documents, and shall be in lieu of refunds. It may be used to pay taxes, duties, charges and fees due to the national government in connection with its operations. A tax credit shall be non-transferable, except when such transfer is by hereditary succession or occurs by operation of law; it may be use by the person or entity to whom it is issued only for as long as its enjoys the benefits and incentives provided for in this Decree; and may not be used so as to result in a refund."