4 govt agencies reject amended tax bill

0

Major amendments to the proposed Tax Incentives Management and Transparency Act (TIMTA) introduced by the Congress are a no go if you ask four of the line departments of the Aquino Administration.

Raising the objections are the Departments of Finance (DOF), of Trade and Industry (DTI), of Budget and Management (DBM), and the National Economic and Development Authority (NEDA).

A joint position signed by the department chiefs was sent to the Senate and the House of Representatives, the DOF said in a statement Tuesday.

The proposed bill aims to promote transparency and accountability in granting tax incentives to businesses, corporations and private individuals. Claims for tax incentives are supposed to be assessed and monitored via a comprehensive data based.


The joint position signed on June 16 raises objections to major amendments to the bill that cover policy and administrative deviations from its original intent as agreed by the DOF and the DTI.

The amendments deleted the House and Senate from filing a report so that NEDA may conduct a cost-benefit analysis on the economic impact of tax incentives.

A “deemed approved” provision was also inserted, under which tax incentives are considered a given if the BIR fails to inform the Board of Investments (BOI) or the Investment Promotion Agency (IPA) and the business entity of its findings six months after the bureau has received the endorsement or recommendation.

“DOF, DTI, DBM, and NEDA jointly propose the reinstatement of the reporting requirement for NEDA to conduct the analysis on investment incentives based on the data submitted by the IPAs and the DOF,” the Finance Department said.

Publishing the impact of tax incentives by NEDA to relevant government offices and authorities offers a higher level of understanding of how tax incentives work for the benefit of the economy, the DOF noted. This ensures fiscal transparency in line with the goal of instituting a transparent and accountable public financial management system, it pointed out.

The line departments also asked that the “deemed approved” provision be deleted from the bill because it shortens the period—from the original three year period to only 180 days—that the BIR is given to audit the books of the entities involved.

This is contrary to what the Tax Code says on the length of time that the BIR is allowed to examine a taxpayer’s books, the DOF said.

Citing the opinion of the Bureau of Internal Revenue, the DOF said three years is not enough to audit the books of a taxpayer.

The original DOF-DTI endorsement noted the 18 months from the time the BOI and the IPA accept and review an application is tantamount to cutting the prescriptive period of the BIR to make any assessment, it added.

Share.
.
Loading...

Please follow our commenting guidelines.

Comments are closed.