The government lost more than P200 billion in foregone revenue collections from 2011 to 2013 because of tax and fiscal incentives granted to several corporations, Bureau of Internal Revenue Commissioner Kim Henares said as she stressed the need for immediate passage of a long-pending bill restructuring the program.
The commissioner said the P200 billion loss highlights the need for the fiscal incentives rationalization bill, which has been pending in Congress for more than 15 years.
The amount represents the combined foregone revenue of tax collecting agencies such as the BIR and the Bureau of Customs.
“You only give incentives to people who need [them]to become profitable. If you’re making a profit already, you have the obligation to share it with the country [because]you’re availing yourself of the services of the country. That’s the reason behind the need for fiscal incentives rationalization,” she said.
The bill is meant to coordinate and organize the grant of tax incentives to different sectors, which has been largely unfettered over the last few years.
“Incentives should be given to the person who is taking the risk. When he takes the risk, the government should support him. Rationalization is saying that these are the only incentives you can give, and [the grant]has to be within a number of years. Beyond that, there’s no extension,” she said.
The bill has been certified a priority measure by the economic team of the administration of President Benigno Aquino 3rd.. The Department of Finance earlier said that the tax perks granted to industries that could stay viable even without the incentives should be cancelled to boost government revenues.
The finance agency noted that with the current tax incentives system that has been largely unaccounted for and uncoordinated, the government loses billions of pesos in revenues every year, which could otherwise have helped improve its fiscal position.