DTI, DOF stall progress of RFI bill in Congress

June 4, 2015 at 14:02

Hopes to pass the proposed rationalization of fiscal incentives (RFI) bill are dimming, as the Department of Trade and Industry (DTI) and the Department of Finance (DOF) continue to butt heads on the measure, making the RFI one of the longest pending bills in Congress.

Even as Senate President Franklin M. Drilon, in a roundtable with the BusinessMirror last week, said that they “are not giving up” on the RFI bill, the DTI and the DOF continue to stall the measure’s progress. Senate Committee on Ways and Means Chairman Juan Edgardo M. Angara said that even if they prioritize the bill, they could not move forward because the DTI and the DOF have yet to come up with a consolidated version.

The RFI, which has failed to pass Congress for 16 years now, is considered the twin measure of another proposed bill, the Tax Incentives Management and Transparency Act (Timta).  Government officials have said that the DTI and the DOF have agreed on a compromise to push the passage of Timta but leave the RFI behind.

Investment-promotion agencies (IPAs), particularly the Board of Investments and the Philippine Economic Zone Authority, have strongly opposed the RFI, as it will significantly cut the fiscal perks that they can offer to investors.

On the part of the DOF, the move will streamline the numerous fiscal incentives that they see as “tax expenditures,” or a source of revenue leakage. House Ways and Means Committee Chairman Rep. Romero S. Quimbo of Marikina agreed that the RFI bill would unlikely move in Congress, saying they are now focusing on the Timta, as well as other economic measures pending.

The DTI had repeatedly assured last year that it is nearing agreement with the DOF on the RFI bill.

An initial consolidated bill was crafted early this year. The DOF and the DTI agreed that the income tax holiday would just be replaced by a 15-percent reduced corporate income tax for 15 years.

Catherine N. Pillas