The proposed Tax Incentives Management and Transparency Act (Timta)—one of the important revenue measures of the Aquino administration—has moved a step closer to being enacted into law, after the two chambers of Congress ratified the congressional bicameral committee’s consolidated version of the proposal.
The Senate and the House of Representatives ratified the Timta late Tuesday and Wednesday, respectively. The chairman of the House Committee on Ways and Means, Liberal Party (LP) Rep. Romero S. Quimbo, said the proposed Timta will be transmitted to President Aquino for his signature.
Quimbo said the proposed Timta, which was included in the priority bills of the 16th Congress, seeks to promote transparency and accountability in the grant and administration of tax incentives to business entities, private individuals and corporations.
The consolidated version of the Timta was principally authored by Quimbo, LP Rep. Maria Leonor Gerona-Robredo of Camarines Sur, Senate President Franklin M. Drilon, Sen. Juan Edgardo M. Angara and Sen. Ralph G. Recto.
Angara, chairman of the Senate Committee on Ways and Means, said the measure sought to provide a solution to the lack of empirical data on fiscal incentives, thus, enabling the government to “evaluate and maximize revenue spent toward boosting the country’s economic growth.”
Drilon, meanwhile, said the main purpose of the bill is to “make public and let the sun shine on the tax incentives which companies enjoy.”
“There should be transparency on the taxes that we are not collecting and waiving in the form of incentives granted to the private sector, so that we will see whether, indeed, the public is best served by these incentives being granted to them,” Drilon said.
Under the bill, all heads of the investment-promotion agencies must submit to the National Economic and Development Authority (Neda) investment-related data, which will include the list of registered business entities, investment projects, investment cost, actual employment and export earnings.
For tax-incentives data, the Department of Finance will furnish the Neda a copy of the reports submitted by the Bureau of Internal Revenue and the Bureau of Customs.
Also, the bill provides that the data and information will be reflected by the Department of Budget and Management in the annual Budget of Expenditures and Sources of Financing, particularly in a section to be called the Tax Incentives Information.
The bill said violators of this act will face P100,000 penalty for the first offense, P500,000 for the second and cancellation of the registration of business entities for the third instance.