MANILA -- Finance Secretary Carlos Dominguez III has opposed an extension of the period, wherein companies in Tourism Enterprise Zones (TEZs) may avail of government incentives.
Republic Act (RA) 9593, otherwise known as the Tourism Act of 2009, was enacted in 2009 but its Implementing Rules and Regulations (IRR) was issued only in November 2016.
The law provides TEZ developers and tourism firms a six-year income tax holiday that may be extended for another six years. The IRR also has a sunset provision, which states that tax incentives may only be given until 2019.
Because the sunset provision will be ending next year, there have been appeals that the income tax holiday be extended further since the IRR was issued seven years after the law took effect. “The law is the law. It’s not my fault that it was not implemented,” Dominguez said in an interview Tuesday.
“We could have not implemented it but I said it’s already there, so might as well implement it. Now, it’s not my fault,” he added.
Finance officials have said that the government is losing billions from tax perks extended to companies that are no longer entitled to it because they have already become financially strong.
Earlier, Finance Undersecretary Karl Chua said that for 2016 alone, the government lost PHP178.56-billion worth of potential revenues due to tax holidays extended to about 3,102 firms registered with investment promotion agencies.
Citing data from the Bureau of Internal Revenue and the Bureau of Customs, Chua said PHP74.53 billion of the supposed revenues were from income tax holidays, PHP46.66 billion from special income tax rates, and PHP57.38 billion from customs duties.
Citing a report from the Department of Finance’s Domestic Finance Group, Chua earlier told lawmakers that including foregone revenues from Value-Added Tax (VAT) exemptions on imports and local VAT, the government lost more in 2016, although he did not give any amount except that it is 71.03 percent higher than the PHP104.40 billion in 2015. (PNA)
