FIRB finalizing tax incentive guidelines

MANILA, Philippines — The Cabinet-level Fiscal Incentives Review Board (FIRB) is completing the guidelines on the suspension of tax incentives for non-compliant firms under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.

In a statement, the FIRB said it is finalizing the guidelines on the suspension or withdrawal of tax incentives, as well as the cancellation of project or activity registration applicable to all registered business enterprises (RBEs).

The guidelines are meant to provide uniform rules for imposing penalties on non-compliant RBEs.

Under the CREATE Law, FIRB has the power to suspend or withdraw tax incentives or cancel business registrations.

The guidelines will clarify the procedure for RBEs when responding to a show cause order issued by their respective investment promotion agencies or the FIRB, or when filing an appeal from an adverse finding.

CREATE aims to help businesses affected by the pandemic through the reduction of corporate income tax rates and maintaining some fiscal incentives.

Firms and investment agencies are required to submit several documents, such as a list of registered business enterprises that enjoy tax incentives, approved projects with an investment capital of P1 billion or less, and registered enterprises that implement remote work arrangements, among others.

Such reports are necessary for the FIRB to fulfill its oversight functions on the administration and grant of tax incentives.

Reports are also crucial since revenue generating offices use them to monitor and audit if agencies are aligned with the objectives of the law.

Further, FIRB said a public consultation by the end of the month would be conducted once the guidelines have been approved by the FIRB technical committee.

Meanwhile, the FIRB also approved applications for tax incentives from new domestic enterprises engaged in the operation of tourist accommodation facilities and the construction of common passive telecommunications tower infrastructures.

Finance chief and FIRB chairperson Benjamin Diokno said the approved investment applications would accelerate the administration’s ongoing economic recovery efforts, specifically in areas of tourism and digitalization.

“As we attract all types of big-ticket local and foreign investments into the country, we also strive to be inclusive and not industry-specific in our grant of fiscal incentives,” Diokno said.

“What we want to ensure is for these projects to result in a win-win situation for both the RBEs and the economy,” he said.