Perks drain gov’t of P482B in 2019

Tax perks will be rationalized under the enactment of the Corporate Recovery and Tax Incentives for Enterprises Law

Tax perks provided by the government to “favored firms” totaled P481.7 billion, which in turn represented foregone revenues for 2019 alone, the Department of Finance (DoF) said.

Still, the DoF said the reported figure represents a decline from the P518.7 billion tax perks given away in 2018 through various investment promotion agencies (IPA) and fiscal incentives granted to cooperatives.

In a report to Finance Secretary Carlos Dominguez III, such tax perks will be rationalized under the enactment of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law -- ensuring future fiscal and non-fiscal incentives to be performance-based, targeted, time-bound and transparent.

VAT perks hit P283.45B

Finance Assistant Secretary Ma. Teresa Habitan likewise added that incentives for the value-added tax accounted for P283.45 billion followed by exemptions from customs duties with P47.59 billion and the percentage tax incentive availed by cooperatives with P1.38 billion. According to her, entities that availed of income tax incentives were 3,083 IPA-registered companies and 4,371 cooperatives--the total number of which make up 57.5 percent of the 11,431 enterprises that were granted income tax perks.

“Under CREATE, the grant and administration of incentives have been rationalized to ensure that the perks received by registered enterprises are benefiting the economy” the DoF said.

P257.23B from fuel marking

In a related development, the Finance chief shared that the country’s fuel marking program has now created a total of P229.5 billion for the government, representing a massive 26.49 billion liters of fuel marked in the market.

Of the overall stock, excise tax collected by the Bureau of Internal Revenue from December 2019 to 30 June 2021 amounted to P29.48 billion while the Bureau of Customs managed to generate P227.75 billion from September 2019 to 8 July 2021.

Dominguez earlier said that the increasing volume of marked fuels represents the program’s effectiveness against erring trade activities.

PHOTOGRAPH COURTESY OF PHOENIX PETROLEUM LOCAL oil company Phoenix Petroleum cements its position as the third biggest oil player in the country with a bigger chunk of the market.