QuestionsQuestions (Republic Act No. 10708)
RA 10708 is the “Tax Incentives Management and Transparency Act (TIMTA).” Its purpose is to enhance transparency and fiscal accountability in the grant and management of tax incentives by enabling government to promptly measure fiscal exposure, monitor/review/analyze economic impact, and optimize social benefits.
IPAs are government entities created by law, executive order, decree, or other issuance that promote investments, administer tax and non-tax incentives, and/or oversee operations of economic zones and freeports. Examples listed include BOI, PEZA, BCDA, SBMA, CDC, JHMC, PPMC, BTPI, CEZA, ZCSEZA, PIA, APECO, AFAB, TIEZA, and other similar authorities created in the future.
Tax incentives are fiscal incentives provided by law to registered business entities, including income tax holidays (ITH), exemptions, deductions, credits, or exclusions from the tax base.
A registered business entity is an individual, partnership, corporation, Philippine branch of a foreign corporation, or other entity organized under Philippine laws that is registered with an IPA.
They must file their tax returns and pay taxes using the BIR electronic system by the NIRC deadline. For incentives administered by IPAs, they must submit to the relevant IPA a complete annual tax incentives report (income-based incentives plus VAT/duty exemptions and related tax base treatments) within 30 days from the statutory deadline for filing and payment.
Within 60 days from the end of the statutory deadline for filing relevant tax returns, the IPA must submit to the BIR its annual tax incentives reports based on the list of registered business entities that filed the incentives report.
No. The Act expressly states that its provisions are without prejudice to the BIR and BOC’s right to conduct assessment within the prescribed periods under the NIRC and TCCP.
The BIR and BOC must submit to the DOF the tax/duty incentives reflected in filed returns and import entries, and actual incentives determined by BIR/BOC. The DOF maintains a single database for monitoring and analysis of tax incentives.
DOF must submit aggregate data to DBM on a sectoral and per industry basis: (1) amount of incentives availed; (2) estimated claims immediately preceding the current year; (3) programmed incentives for the current year; and (4) projected incentives for the following year. This data must be reflected in the BESF under a section called the Tax Incentives Information (TII).
The TII is limited to aggregate data related to incentives availed by registered business entities, based on submissions of DOF and concerned IPAs, categorized by sector, by IPA, and type of incentive.
No. The Act states nothing shall be construed to diminish or limit the amount of incentives IPAs may grant pursuant to their charters and existing laws, nor to prevent/delay promotion and regulation of investments, processing of applications, or evaluation of incentive entitlement.
NEDA must conduct cost-benefit analysis on investment incentives to determine their impact on the Philippine economy.
They must submit to NEDA aggregate tax incentives (based on the incentives reported under Section 4) and aggregate investment-related data on a sectoral/per industry basis, potentially including investment projects, investment cost, actual employment, and export earnings.
First violation: fine of PHP 100,000. Second violation: fine of PHP 500,000. Third violation: cancellation of registration. If failure to show proof is not due to the registered business entity’s fault, it is not a ground for suspension of ITH and/or other income-based incentives availment.
After due process, they may be penalized with a fine equivalent to their basic salary for one (1) to six (6) months, or suspension for not more than one (1) year, or both, in addition to any criminal and administrative penalties under existing laws.
It is a Joint Congressional Oversight Committee composed of chairpersons of relevant committees from both Houses plus four additional members from each House (including specified chairpersons). It monitors and ensures proper implementation of the Act.
The Secretaries of DOF and DTI, in coordination with the NEDA Director-General, BIR and BOC Commissioners, and heads of concerned IPAs, must promulgate the IRR within 60 days from effectivity. Failure to promulgate does not prevent implementation upon effectivity.
It takes effect fifteen (15) days after complete publication either in the Official Gazette or in at least one (1) newspaper of general circulation.