The Tax Incentives Management and Transparency Act (TIMTA) is a law that focuses on promoting transparency and accountability that will in turn encourage investors to bring businesses in the country, provide more employment opportunities and boost the economic growth, according to Senator Sony Angara, sponsor of the law and chairman of the Senate ways and means committee, Thursday.
Under the new law or Republic Act 10708, registered business entities must file with their investment promotion agencies a complete annual tax incentives report, which will then be submitted to the Bureau of Internal Revenue (BIR), the Bureau of Customs (BOC) and the Department of Finance (BOF). “For transparency purposes, these data and information will be reflected by the DBM in the annual Budget of Expenditures and Sources of Financing which shall be known as the Tax Information section,” Angara said.
TIMTA gives an answer for the absence of logical information on financial impetuses and what it returns to the economy. The law will permit the legislature and policymakers to settle on better choices in administering the usage of existing laws related to investments and in dealing with the country’s finances through NEDA’s cost-benefit analysis, he said.
He emphasized that the law would not tamper with the fiscal incentives presently enjoyed by the private sector given a provision under the bill. The provision explicitly states that “Nothing in this act shall be construed to diminish or limit in whatever manner, the amount of incentives that IPAs may grant,” he added.
Any business entity, which fails to comply with filing and reportorial requirements will have to submit to the consequences with financial penalty. The first violation is penalized with a fine amounting to P100, 000; on the second failure to comply costs P500, 000; and finally, cancellation of the registration of the business entity for the third violation.
Congresswoman Leni Robredo and Congressman Miro Quimbo supported the passage of the law and helped reconcile conflicting provisions. Angara said that they are now working on the passage of the administration’s another priority bill, which is the Customs Modernization and Tariff Act. “We are hoping that this would be reciprocated with the consideration of our income tax reform bill,” he said.