Firms use productivity measures to enjoy tax perks

Most companies in 2015 took advantage of implementing productivity measures as a way of getting tax breaks, the Philippine Statistics Authority (PSA) reported.

In a report titled “Productivity Incentive Schemes 2015,” the PSA said that during the reference period, a total of 3,339 different productivity programs were adopted by 2, 448 establishments nationwide. These pertain to both cash and non-cash productivity-based incentives granted to employees by establishments.

Classified by major industry, 31 percent productivity programs were carried out in the manufacturing industry. This was followed by retail trade, repair of motor vehicles and motorcycles (20 percent); and accommodation and food services activities (15 percent).

The report said 51.4 percent of the 2,448 establishments implementing productivity measures have availed of tax incentives as provided for un- der the law.

The Productivity Incentives Act of 1990, otherwise known as RA 6971, provides tax incentives/reductions to establishments that implement productivity improvement programs and provided productivity bonuses and other forms of incentives to their employees.

Availment of tax incentives were seen across industries but those that reported a high level of availment of tax cuts were arts, entertainment and recreation; water supply, sewerage, waste management services; real estate; mining and quarrying; and accommodation and food service activities.

Rank and file employees received the most cash and non-cash incentives in 2015.

For non-cash incentives, the giving of plaques, trophies and certificates of recognition was the most common form of incentive during the reference period. This was followed by food; free or subsidized travel or leisure; non-food items like gadgets; scholarships and other forms of non-monetary incentives.