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The Fiscal Incentives Review Board approved tax incentives for the P81-billion subway project in Makati City
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The package of incentives is confined to the project’s rail operation
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The subway is expected to begin commercial operations in January 2026
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The incentives package includes four years of income tax holiday, followed by five years of enhanced deductions and duty exemption on importation for the construction, operation, management, and maintenance of the rail project
The Fiscal Incentives Review Board (FIRB) has approved the grant of tax incentives for the rail operations of an P81-billion subway project in Makati City.
The subway is expected to begin commercial operations in January 2026.
A majority of the five-member FIRB chaired by Finance Secretary Carlos Dominguez III approved last month the grant of four years income tax holiday, followed by five years enhanced deductions and duty exemption on importation for the construction, operation, management, and maintenance of the rail project.
The FIRB is composed of the Department of Finance, Department of Trade and Industry, Department of Budget and Management, National Economic and Development Authority, and Office of the President.
Dominguez said the package of incentives is confined only to the activity applied for — rail operation. It will not apply to other business activities to be generated from the subway operations, such as the lease of retail areas and advertising, which should be subject to the regular corporate income tax rate and other applicable taxes.
In approving the project, the FIRB considered the projected increase in economic productivity of P24.4 billion per year once the subway system becomes operational in 2026.
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.
Trade Secretary Ramon Lopez, who is also FIRB co-chair, said this productivity boost and other benefits offset the economic costs to be incurred by the government, such as foregone revenues.
Dominguez said the Makati City government and the Department of Transportation should work out details of how to connect the proposed subway to the 36-kilometer (km) Metro Manila Subway project of the national government.
In October 2018, the Makati City government awarded the public-private partnership project to Philippine Infradev Holdings Inc. and its partners.
The Makati subway will be a 10-km intra-city mass transport system with up to 10 stations that will traverse Makati City’s central business districts. It is expected to accommodate up to 700,000 passengers per day aboard six car trains, each with a capacity of about 200 people.
