DoF: Govt gave away P1.12T to firms
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Tue, 06 Aug 2019 17:07:15 +0000
The government has posted an estimated P1.12 trillion of foregone revenues in tax perks awarded to select companies from 2015 to 2017, the Department of Finance (DoF) revealed on Tuesday.
In a statement, the DoF said that such foregone revenues include income tax incentives, tax incentives on customs duties and tax incentives on import value added tax given away to 3,150 companies for the three-year period.
In a breakdown, it noted that about P301.2 billion in incentives was granted in 2015, P380.7 billion in 2016, and P441.1 billion in 2017.
Among the investment promotions agencies that granted incentives to registered enterprises, the Philippine Economic Zone Authority gave away the lion’s share of tax incentives worth about P879.1 billion, or about 78 percent of the three-year total, the DoF added.
“This is a truly massive amount,” Finance Undersecretary Karl Kendrick Chua said, pointing out that every peso given away in tax incentives is a peso that could have gone to constructing roads, classrooms or health centers, or to hiring more teachers, doctors and nurses.
“The government could have implemented so many programs and projects with P1.12 trillion that was given away to companies,” he added.
While acknowledging that these incentives had also benefitted the country in the form of job creation and investments in the domestic economy, Chua stressed that the government “cannot keep giving away tax incentives indiscriminately and indefinitely, especially if the amount keeps getting bigger and bigger every year.”
That said, he cited President Duterte’s call for the immediate passage into law of the Package 2 of the Comprehensive Tax Reform Program, which seeks to modernize and improve the incentive system.
Package 2 will establish a single menu of superior incentives that are performance-based, time-bound, targeted, and transparent.
“The proposal under Package 2 does not eliminate incentives,” Chua emphasized.
“But if we are going to be giving away billions of pesos in tax incentives, we need to make sure that the companies who get to enjoy these incentives truly help us achieve inclusive development, as envisioned by President Duterte,” he added.