The Department of Trade and Industry (DTI) has assured businessmen that the consolidate measure it is currently preparing with the help of the Department of Finance (DOF) on the reporting of incentives will not limit the grant of fiscal and nonfiscal perks.
At the sidelines of a national food fair on Wednesday, Trade Secretary Gregory L. Domingo spoke on the developments in the crafting of the controversial Tax Incentive Monitoring and Transparency Act (Timta).
He said the two departments have agreed on reporting incentives in an aggregate basis as opposed to a company-level reporting.
“We want to be transparent, as well. Our only concern, which they [DOF] have also acknowledged, is we don’t want firm-level data but aggregated. By sector and by type of incentive are okay us, but not by company,” Domingo said.
However, on the point whether a tax expenditure account (TEA) will be created under the General Appropriations Act (GAA), Domingo said the Senate version has already removed this provision.
The DOF, however, has not agreed on this yet.
“We prefer the Senate version, but we have to reach an agreement with the DOF; we still need to discuss it,” he added.
In a previous position paper, the DTI, through the Board of Investments, has opposed the creation of the TEA under the GAA, saying the account will hinder the operation of investment-promotion agencies (IPAs) because of the stringent budgetary process that the appropriation law undergoes.
The TEA will serve as an account for the projected incentives that will be handed out to various IPAs annually. The trade office earlier said the TEA would essentially cap the amount of incentives to be given to qualified projects, as these would be based on projected investments for a given year. If the incoming investments exceeded the projection, the trade department would be forced to ask Congress for additional appropriation.
Catherine N. Pillas