Lawmakers will not act on the rationalization of fiscal incentives (RFI) bill until the proposed Tax Incentives Management and Transparency Act (Timta) has hurdled the bicameral committee.
Liberal Party (LP) Rep. Romero Quimbo of Marikina City, chairman of the House Committee on Ways and Means, said members of the bicam are eyeing to meet in August to reconcile the approved versions of the proposed Timta of the lower and the upper chambers.
“We will wait first for Timta [to be passed at the bicameral committee];
we want one battle at a time. I think this Timta is [already] a major step. Timta is a rehearsal to fiscal incentives so we will see first how it will proceed,” Quimbo said.
The measure seeking to promote transparency and accountability in the grant and administration of tax incentives to business entities, private individuals and corporations will be signed into a law before the year ends, the lawmaker said.
The lower chamber’s Timta consolidated bill, House Bill 5831, principally authored by LP Rep. Ma. Leonor Gerona-Robredo of Camarines Sur, will be merged with the Senate version prepared by the Senate Committee on Ways and Means, with Senators Franklin Drilon, Ralph Recto and Juan Edgardo Angara as authors.
Still, Quimbo is confident that the RFI bill will also be passed before the 16th Congress ends in June next year.
Quimbo has said the Joint Foreign Chambers and Philippine business groups have expressed concern for the passage of RFI.
“They expressed concern over fiscal incentives rationalization. But I gave them assurance that the fiscal incentives rationalization bill we will pass shall be something that will make our investment climate more attractive and not the contrary,” the lawmaker has said.
The RFI bill, currently under committee deliberations, has been facing strong opposition from business groups due to its provisions, particularly the lifting of the tax- and duty-free incentives of several industries.
Under the RFI draft bill submitted by the Department of Finance (DOF) and the Department of Trade and Industry (DTI) to the House Committee on Ways and Means, companies registered with the Philippine Economic Zone Authority (Peza) are given two options in the measure.
They can opt for a four-year income tax holiday with either 5-percent tax on gross income earned (GIE) in lieu of local and national taxes, except valued-added tax (VAT) and real property tax (RPT) for 11 years; or 15-percent reduced tax on corporate income in lieu of local and national taxes, except VAT and RPT for 11 years, the bill said.
Peza-registered companies, under the second option, are given the choice of either 5-percent GIE for 15 years, in lieu of local and national taxes, except VAT and RPT for 15 years, or 15-percent reduced tax on corporate income in lieu of local and national taxes, except VAT and RPT for 15 years.
According to Quimbo, his panel is still studying the RFI version of the DOF and DTI, as well as the four bills filed in the lower chamber.