THE Department of Finance (DoF) said it is considering a review of tax incentives granted to companies every two years to validate whether the perks given are having a “positive impact,” with the review period contained in upcoming tax legislation.
In a statement Thursday, Finance Secretary Carlos G. Dominguez III said the tax incentives should be placed on a two-year review timetable similar to the mining audit process.
“It thus behooves the government to perform a regular audit of these companies to see if these beneficiary-firms have indeed made use of their incentives to make an overwhelmingly positive impact on society,” Mr. Dominguez was quoted as saying in the statement.
The interagency Mining Industry Coordinating Council (MICC) audits miners every two years, reviewing their compliance with mining, tax and environmental regulations.
House Bill (HB) 4157, which if passed will become the Corporate Income Tax and Incentives Rationalization Act (CITIRA), authorizes the Fiscal Incentives Review Board (FIRB) to review the performance of recipients of incentives every two years.
Under the bill, FIRB will have the authority to approve incentives granted by investment promotion agencies (IPAs) to registered companies.
It can also cancel or suspend firms’ tax incentives in the event of violations.
“It is one of the possible functions of the FIRB which is mandated in the CITIRA bill to oversee the performance of the recipients so we can review it every two years, that’s the feasible proposal,” Undersecretary Karl Kendrick T. Chua told reporters on Thursday on the sidelines of a Senate hearing.
The CITIRA bill is now awaiting second reading from the House of Representatives. — Beatrice M. Laforga