Philippines: Dominguez wants biennial audit of tax perks to weed out undeserving firms

• Tax incentives given to companies must be reviewed every two years as the Philippines has been too generous in giving away tax incentives to a select group of companies, according to the head of the Duterte administration’s economic team.
• In a statement on 3 Sep 19, Finance Secretary Carlos Dominguez III said it was necessary to institute a system similar to that of the Mining Industry Coordinating Council, which had made it a practice to conduct regular audits of mining companies once every two years beginning in 2017.
• The Department of Finance (DOF)—seeking to reform the country’s antiquated tax regime—maintains the Philippines is the only major economy in the world with a system that grants incentives to companies in perpetuity.
• The Philippines gave away an estimated PHP1.12tr in tax incentives and exemptions to a select group of 3,150 companies from 2015 to 2017, according to the DOF. This is equivalent to over twice the 2019 budget of the Department of Public Works and Highways, which is PHP549.4bn.
• At present, the select group of over 3,000 companies—including those on the elite list of Top 1,000 corporations—enjoy incentives that allow them to pay discounted tax rates of only 6%-13% of net income.

External Link : https://business.inquirer.net/278333/dominguez-wants-biennial-audit-of-tax-perks-to-weed-out-undeserving-firms-2