The Tax Incentives Management and Transparency Act (TIMTA) was finalized and ratified by the Senate on Wednesday afternoon and by the House of Representatives later that night, ahead of session adjournments on Friday.

The measure is among the priorities sought by both the Executive branch and by business, and is expected to enhance transparency and investor confidence in granting tax perks.

Marikina City Rep. Romero Federico S. Quimbo (2nd district), chairman of the House committee on ways and means, said the approved measure will be up for enactment soon.

“Yes, By Monday it will be sent (to Malacañang) hopefully,” Mr. Quimbo said via text message.

The two chambers held one bicameral committee session to reconcile provisions of the two TIMTA bills on Sept. 9 for House Bill 5831 principally authored by Camarines Sur Rep. Ma. Leonor G. Robredo and Senate Bill 2669 filed by Senator Paolo Benigno A. Aquino IV.

The House version was used as the joint panel’s working draft, according to the signed bicameral committee report. It was the House committee that prodded the Finance and Trade departments to forge an agreement on the TIMTA after an earlier deadlock on some key provisions.

The new bill requires all businesses enjoying income-based tax incentives — such as income tax holidays and a 5% tax on gross income earned in lieu of other taxes — to electronically file their annual tax returns with the Bureau of Internal Revenue (BIR) each year.

At present, only large players are required to use e-filing, in accordance with regulations issued by the BIR in March.

Firms enjoying perks are also required to submit an annual tax incentives report of all their duty exemptions and tax deductions to their respective investment promotion agencies (IPAs). The IPAs, in turn, will submit these data to the BIR.

Meanwhile, the Finance department is tasked to come up with a single database of incentives data, compiling the reports collected by the BIR and the Bureau of Customs (BoC) on incentives.

The Budget department will publish these data under a Tax Incentives Information category in the Budget for Expenditures and Sources of Funds of the annual budget document, but only as “aggregate data” listed on a sectoral or per-industry basis. Mr. Quimbo earlier said that this was in keeping with confidentiality agreements forged between government and the export firms.

The National Economic and Development Authority (NEDA), meanwhile, will be tasked to conduct a regular cost-benefit analysis using the Finance department’s incentives data to assess its impact to the economy.

Companies that fail to comply with the data submission rules will be fined P100,000 for the first offense and P500,000 for the second offense. They may also lose their registration as a business entity upon third offense.

Additional rules covering the reporting scheme will be drafted by the Trade department with the NEDA, BIR, BoC, and the IPAs following the bill’s passage.

Asked when President Benigno S. C. Aquino III will sign the bill, Presidential Communications Secretary Herminio B. Coloma, Jr. said: “Office of the President will await enrolled copy from Congress. It will undergo usual due diligence review before it is signed into law by the President. It was one of the bills in the priority legislative agenda of the President.”