The Philippine government is giving too many incentives to various businesses, Commissioner Kim Henares of the Bureau of Internal Revenue said.
Henares made the observation recently when the House Committee on Ways and Means asked her about her stance on the proposed Fiscal Incentives Rationalization bill which seeks to streamline the tax breaks for businesses in order to maximize the use of available funds—a priority legislation of the Aquino administration.
Henares cited the case of the oil and mining industries which enjoy huge tax perks despite their high income.
“The gas stations have certain tax exemptions because of the Oil Deregulation Law, while the mining industry enjoys tax incentives even if the raw materials they got from mining here are processed abroad. These are big players,” Henares said before the House Ways and Means panel chaired by Rep. Romero Quimbo of Marikina .
Under existing laws, Henares lamented that the mining companies get the raw materials in the country such as ore and have it processed in a plant abroad. Thereafter, the Philippines would have buy these semi-processed products back which make it more costly.
“If they only engage in mining here for raw materials, they should not be given exemption. At present, they are given the [fiscal]incentive even if they do not out up a plant here to process the raw materials they got. They should put up a plant here to be given the incentive,” Henares, a lawyer, argued.
“Having the processing plants here is very important because it means investment. With investments, the job generation will come. That is where the incentive should come in,” Henares added.
Under the proposed Fiscal Incentives Rationalization bill authored by Reps. Rufus Rodriguez of Cagayan de Oro and Maximo Rodriguez, Jr. of Abante Mindanao party-list, fiscal and non-fiscal incentives will be granted to: businesses under investments priorities plan, registered export companies, registered enterprises in ecozones and freeport zones, registered domestic enterprises, domestic strategic enterprises, registered domestic enterprises in Mindanao and in the 30 poorest provinces outside of Mindanao or less developed areas, private ecozone and domestic industrial zone developers and registered enterprises in supply chain cities.
In response to Heneres’ concerns involving the mining sector, House Ways and Means panel Chair and Rep. Romero Quimbo of Marikina pressed Henares to ring Malacañang with its version of the Mining bill, a measure which seeks to increase the government’s take on taxes imposed on the mining industry.
“The Mining Bill has been pending in the Palace since last Congress. You should follow it up with the Palace because it is material in our debate of rationalizing fiscal incentives,” Quimbo said. LLANESCA T. PANTI