Congress sets fiscal perks harmonization deadline
November 10, 2014 at 10:45
by Bernie Magkilat
October 27, 2014
The Departments of Trade and Industry and Finance have until December this year to agree on the Harmonization of Fiscal Incentives Bill otherwise this priority bill will not have a chance of passing in the 16th Congress.
Rep. Miro Quimbo, chairman of the powerful House ways and means committee, issued this ultimatum to both government agencies in a talk with reporters after his speech before the Makati Business Club.
“Both line agencies have not yet genuinely agreed to the final version. If they don’t send it before end of year, I don’t think it will have a chance in this Congress,” Quimbo said.
According to Quimbo, he got some feedback that some senior officials of the DTI were not happy with the supposed consolidated version and had been asking for an audience.
“I urge them to sit down and agree to it and I hope the agreement is genuine,” he said. He said it would be a waste of time for Congress to table it for hearing and both agencies will still argue about the bill.
Quimbo, however, said that once the bill lands in his committees, “we are going to fast track it.”
The Harmonization of Fiscal Incentives Bill has been a priority bill of the Aquino administration because it is going to give clearer guidelines to investors on the fiscal incentives that are available once they make an investment in the country. Once passed into the law, it is expected to usher in more foreign direct investments into the country.
Quimbo lamented the fact that this proposed bill to amend the current fiscal incentives regime in the country had been with the 9th Congress or in 1992 but never seen the light of day.
Quimbo did not mention the provisions that DTI had some opposition, but said the bill is still with the Economic Cluster of the Cabinet.
The Board of Investments, the government premier investment generating agency, has argued that the grant of fiscal of incentives is necessary to attract foreign investors but the Department of Finance would counter by saying that the grant of fiscal incentives is a drain to the government coffers.
Earlier, DTI Secretary and BOI chairman Gregory L. Domingo said they 95 percent agreement with the DOF on the said bill. One of which is the abolition of the grant of income tax holiday, which is going to be replaced with a reduced corporate income tax of 15 percent from the current 30 percent rate.
The reduced CIT is good for 10 years for BOI-registered enterprises only.
