So much has been written about the rationalization of tax incentives under the proposed Comprehensive Income Tax and Incentives Rationalization Act (Citira) or House Bill 4157. Thus, an understanding as to how the rationalization actual works is crucial.
In the overall, Citira proposes a single-menu of incentives, clear criteria for their grant and monitoring, and the centralization of the oversight of the granting of the incentives through the Fiscal Incentives and Review Board (FIRB). These proposals seek to address the lack of direction and grant of incentives by numerous IPAs or investment promotion agencies in our country. The government believes the rationalization of tax incentives will solve a host of problems, including tax leakages or foregone revenues (estimated at P441 billion in 2017) and the failure of incentives to benefit or target priority industries and areas. For us tax practitioners, it will eliminate the confusion and issues that arise in the application or availment of incentives under our numerous incentives laws.