By CHINO S. LEYCO
The Department of Finance (DOF) said yesterday that the government needs to expand the powers of the Fiscal Incentives Review Board (FIRB) to advance the public interest in granting tax incentives to private corporations.
In statement, the DOF said the proposed expansion of the FIRB, an existing interagency committee that grants tax subsidies to government-owned or -controlled corporations (GOCCs), is “a good governance measure.”
According to the DOF, the coverage of FIRB needs to be expanded to include approval of tax incentives for private businesses and serve as the oversight body for the country’s 13 existing investment promotion agencies (IPAs).
This plan for the DOF-led FIRB is among the measures under the pending Corporate Income Tax and Incentives Rationalization Act (CITIRA) that is being pushed by President Rodrigo R. Duterte.
According to the DOF, the FIRB is necessary to ensure that registered business enterprises receiving tax breaks subsequently deliver the jobs and investment that they had promised when they sought such fiscal incentives from their respective IPAs.
This proposal is not unique and is in fact practiced in the region, the DOF said.
For instance, Malaysia, known to have a world-class investment incentive system, has a similar institution called the National Committee on Investment (NCI) that approves all incentives granted by its 33 IPAs.
Under the current system, there are 13 IPAs in the Philippines that are largely autonomous, each with its own mandate, menu of tax incentives, and authority to grant them largely without the approval or knowledge of the DOF.