Escudero: No tax exemption for Maharlika corp

SENATOR Chiz Escudero said it is “bad policy” to give tax exemption to the proposed Maharlika Investment Corporation (MIC), which will manage the country’s Maharlika Investment Fund (MIF).

Under the proposed bills, Escudero said the MIC will be exempted from national and local taxes, and from coverage of the Governance Commission for Government-owned and controlled corporations (GCG).

“It is bad policy to have a lot of exemptions and very difficult to implement, if at all. So, I think they should not continue with that policy,” he said, adding that the current administration should uphold its “no tax exemption” policy.

He also questioned the perks to be granted to the MIC and expressed concern on the many privileges that the MIC will get supposedly to attract investors and augment government resources.

Escuderoe cited Section 31 of SB 1670 which provides that the following transactions and assets of the MIC and MIF shall be exempt from “local and national taxes, direct and indirect, that may be imposed under the Local Government Code of 1991, and the National Internal Revenue Code of 1997, as amended, pursuant to the regulations to be issued by the Department of Finance (DOF), upon the recommendation of the Bureau of Internal Revenue (BIR).”

He said importation of supplies and equipment by the MIC and MIF shall also be exempt from customs duties, in accordance with the provisions of Republic Act No. 10863 or the Customs Modernization and Tariff Act.

The MIC, he said, should be obligated to pay the taxes due as the government, and if it wants to, can always funnel the money back to the Maharlika Fund by way of the Tax Expenditure Fund as provided for in the annual General Appropriations Act.

But Sen. Sonny Angara said everything is not yet final as some progress has been made in improving the bill and introducing safeguards. Angara said he believes to come up with a better MIF in the upcoming Senate hearings.

“We will scrutinize every minute details,” he added.

Escudero further said the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP), the financial institutions eyed to be the major contributors to the MIF, have been paying taxes as the rest of the other corporations.

“The Land Bank and the DBP do not do not enjoy these exemptions. So, why give it to the MIC?” he asked.