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DOF wants greater control of all tax perks

By: - Reporter / @bendeveraINQ
/ 05:06 AM August 04, 2018

The Department of Finance (DOF) wants to expand the coverage of its fiscal incentive audit to include all government agencies that grant exemptions as well as private entities under the proposed tax reform package “2 Plus.”

This can be done by amending the Tax Incentives Management and Transparency Act (Timta law) signed into law in 2015, documents obtained by the Inquirer showed.

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Specifically, the DOF was adopting Senate Bill No. 1702 of Senator Aquilino Pimentel III, which aimed to include under Timta’s coverage agencies the Armed Forces of the Philippines, Bureau of Internal Revenue, Cooperative Development Authority, and the Department of Social Welfare and Development, all of which administer tax-free perks.

At present, the Timta law only reviews the tax incentives given away by investment promotion agencies.

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As such, private individuals, corporations, cooperatives and organizations enjoying tax exemptions as well as all nongovernment organizations, whether taxable or exempt, will be mandated to file their tax returns and pay liabilities to the BIR under the DOF’s proposal.

Registered individuals and other entities must also include in the report their exemptions from local taxes.

Currently, reporting foregone revenues from incentives covering value-added tax and local business taxes are not prescribed under the Timta law.

Once the Fiscal Incentives and Review Board assumes greater power in the granting of tax incentives as proposed by the DOF under the second tax package, it will conduct the cost-benefit analysis in tandem with state planning agency National Economic and Development Authority (Neda).

Only Neda currently undertakes the cost-benefit analysis of fiscal perks under the Timta.

The DOF also wanted to accrue to the general fund the collections from fines paid by entities found to have violated the Timta law.

Besides amending Timta, package “2 Plus” also aims to slap higher excise taxes on tobacco and alcohol products, stop the sale of “loose”/per-stick cigarettes and e-cigarettes, and collect royalties from all mining operations.

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TAGS: Department of Finance, DoF, tax reform package “2 Plus.”
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