In bid to ensure that businesses receiving incentives will continue to deliver their jobs, the Department of Finance (DoF) mandated the Fiscal Incentives Review Board (FIRB) to serve as a “necessary good governance measure.”
The DoF on Monday clarified that the role of FIRB is to advance the public interest in the granting of tax incentives to private corporations.
According to the DoF, the FIRB will also serve as the oversight body for the 13 existing investment promotion agencies (IPA) to ensure the registered business enterprises receiving tax breaks subsequently deliver the job and investment they had promised when they sought fiscal incentives from their respective IPA.
Finance Undersecretary Karl Kendrick Chua said the proposal is designed to promote the people’s interests by ensuring that incentives granted will lead to the creation of more jobs for Filipinos and opportunities to apply for incentives are made available to micro, small and medium enterprises (MSME).
Chua added that under the current system, the 13 IPA in the Philippines 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.
“As a good governance institution, the FIRB will promote three principles: transparency, accountability and participation. Following international best practices, the FIRB will ensure that the process in granting incentives is transparent,” Chua said.
Moving forward, the FIRB is also tasked to conduct regular monitoring and evaluation to assess the performance of businesses receiving incentives.
The FIRB is an existing interagency committee, chaired by the DoF, which currently grants tax subsidies to government-owned or-controlled corporations.
Under the proposed Corporate Income Tax and Incentives Rationalization Act or CITIRA, the FIRB’s coverage is expanded to include approval of tax incentives for private businesses.