The Department of Trade and Industry’s (DTI) Board of Investments (BOI) and the Department of Finance (DOF) are working at full speed to finish the implementing rules and regulations (IRR) of the Tax Incentives Management and Transparency Act (TIMTA).
The IRR is about 70 percent complete and both agencies continue to meet regularly to thresh out the few remaining issues.
TIMTA or Republic Act No. 10708 provides for transparency in the management and accounting of tax incentives administered by investment promotion agenies (IPAs).
As mandated by the law, the Secretaries of the DTI and DOF have to coordinate with the Director-General of the National Economic and Development Authority (NEDA), Commissioners of the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC), and heads of the IPAs to promulgate its IRR.
“Things are moving forward,” said Trade and Industry Undersecretary and BOI Managing Head Ceferino Rodolfo. “BOI and DOF have been meeting with the concerned agencies and the other IPAs to reconcile and consolidate inputs on a number of concerns on the proposed IRR provisions.”
“Within the BOI, we had regular meetings and came up with our version of the draft IRR on January 19, 2016. Several meetings were also held with the IPAs and six meetings with the interagency technical working group composed of the BOI, DOF, BIR, BOC, and the NEDA,” Undersecretary Rodolfo said.
“The interagency coordination is an important part of the process for drafting the IRR. We want to ensure that the IRR maps out a robust mechanism that will show accurate and most-up-to-date information. At the same time, there is need to make certain that in provision of such information, no unnecessary procedural burden is passed on to the investors,” he said.
In order to do a thorough job, Undersecretary Rodolfo said, the government agencies involved will request Congress for an extension of the period to formulate the IRR.
BOI and DOF met yesterday (May 5) to resolve the remaining outstanding issues of the IRR namely, the specific data and information that should be submitted by IPAs to companies, IPAs to BIR, BIR to BOC to DOF, and IPAs to NEDA; BOI’s evaluation of income tax holiday applications of investors; and the conduct of Cost-Benefit Analysis by NEDA.
Undersecretary Rodolfo said that the inclusion in the IRR of BOI’s mandate to evaluate income tax holiday applications of investors is an inherent task of the agencyas mandated by law.
BOI, as provided by Executive Order 226, is mandated to do a thorough evaluation on the application of investors for income tax holidays.
In 2013, for example, Undersecretary Rodolfo said that with BOI’s strict implementation of the process, the government saved as much as P2 billion worth of income tax holidays to registered firms.