Drilon bats for review of fiscal incentives, not imposition of new taxes
President Duterte’s economic managers should support the review and rationalization of fiscal incentives law and not call for the imposition of new taxes.
Senate President Pro Tempore Franklin Drilon made the call as he urged the government to back
a proposal pending in the Senate that seeks to rationalize the fiscal incentives granted to businesses as a way of increasing government revenue rather than continue its plan to raise taxes on fuel products.
Drilon urged the Department of Budget and Management (DBM), Department of Finance (DOF), and the Department of Trade and Industry (DTI), in particular to focus on efforts to rationalize tax incentives “to generate additional revenues to help offset the projected dip in revenues that may arise from income tax cuts.”
“I hope that our economic managers will work closely with Congress for the long-sought Rationalization of Fiscal Incentives law instead of spending its time on a tax hike on petroleum products that will surely negatively affect our people,” Drilon said in a statement.
“If our aim is to increase revenues, then the government should look at reviewing the various laws on the grant of tax incentives and plug the leakages in our tax system,” the Senate leader added.
“We should not pass the buck and shift the burden to our people,” Drilon said.
He also said the administration should try to exhaust other means to compensate for the expected foregone revenues from the proposed income tax cut.
The senator had earlier filed Senate Bill No. 229 which seeks to review the government’s system of granting incentives to business enterprises in the country “in order to ensure that grant of incentives promotes social and economic benefits to Filipinos.”
As author of the law, Drilon said the measure would cover all incentives granted by all investment promotion agencies (IPAs) such as the Board of Investments and Philippine Economic Zone Authority (PEZA) to foreign and local business enterprises.
Drilon said the government would be able to assess the economic impact of these incentives by reviewing the grant and administration of incentives to business enterprises noting that there are about 186 laws on numerous fiscal and non-fiscal incentives and subsidies in the country.