The Market Monitor Minding the Nation's Business
By Luis Leoncio
President Aquino signed into law on December 8 the Tax Incentives and Management Act (Timta), which was much anticipated by the business sector, as it proposes to streamline the granting of government tax perks to business projects.
Mr. Aquino bared the signing of the law during his speech at the 2015 Integrity Summit on Dec. 9.
“These laws passed by our partners in Congress, among many others, will certainly help foster an environment conducive to growth long after I step down from office,” President Aquino said.
The granting of tax incentives was identified as among the source of leakages that cut into government revenues.
The law will provide guidelines to promote fiscal accountability and transparency in the granting and management of tax incentives.
It would do so by developing means to measure the government’s fiscal exposure on these grants and to enable the government to monitor, review, and analyze their economic impact and, thus, optimize the social benefit of such incentives, Palace Communications Secretary Herminio Coloma Jr. said.
Sen. Juan Edgardo “Sonny” Angara lauded the signing of the law.
“The law focuses on promoting transparency and accountability, which will, in turn, encourage investors to bring more businesses to our country, provide more employment opportunities, and boost our economic growth,” Angara said.
Angara, sponsor of the law and chairman of the Senate Ways and Means Committee, thanked his fellow senators and members of the House of Representatives, particularly his counterparts Reps. Miro Quimbo of Marikina City and Leni Robredo of Camarines Sur, for working hard to approve the measure.
”I also thanked President Aquino for signing this bill, which is one of his priority economic reforms given his administration’s good governance thrust. We are now working for the passage of the administration’s another priority bill, the Customs Modernization and Tariff Act. We are hoping that this would be reciprocated with the consideration of our income-tax reform bill,” Angara said.
Under Republic Act No. 10708, registered business entities must file with their investment promotion agencies (IPAs) a complete annual tax-incentives report, which will be then submitted to the Bureau of Internal Revenue, the Bureau of Customs, and the Department of Finance (DOF).
For monitoring and analysis of tax incentives granted, the DOF shall maintain a single database and submit to the Department of Budget and Management (DBM) the actual amount, estimate claims, current year’s programmed amount, and the following year’s projected amount of tax incentives.
For transparency purposes, these data and information will be reflected by the DBM in the annual Budget of Expenditures and Sources of Financing, known as the Tax Incentives Information Section.