CLARK FREEPORT— The Clark Development Corporation (CDC) has gained headway in the efficient monitoring of economic contributions of locators following its adoption of an online system that will aid the government in analyzing the impact on its grant of tax incentives.
CDC has been one of the first Investment Promotion Agencies (IPA) to adopt this year Republic Act 10708, also known as the Act enhancing Transparency in the Management and Accounting of Tax Incentives Administered by IPAs (TIMTA).
In a report to CDC President Noel F. Manankil, CDC’s Business Development and Enhancement Group stated that the state-run firm is one of the first of IPAs to introduce the electronic filing of TIMTA Reports and Application for Renewal of Business Permits using web-based applications.
The report said that the application was designed by the CD Information Technology (IT) Group for an efficient way of capturing locators’ data as required by law.
The TIMTA law aims to develop a means to promptly measure the government’s fiscal exposure and at the same time, monitor, review, and analyze the economic impact on its grant of tax incentives, such as those which come in the form of income tax holidays (ITH), exemptions, deductions, credits or exclusions from tax base, to registered business entities with the end objective of optimizing the social benefits of such incentives.
At present, Clark has about 929 locators wherein all the locators are required to comply with the automation program introduced in the TIMTA law.
Foreign locators in Clark are businesses from US, Japan, Taiwan, China, South Korea, UK, Italy, Canada, among others.
In 2016, Clark was able to export $3.32 billion with total investments of $1.02 billion from the new locators and locators who have expanded their investments inside the Freeport.
Among the salient features of the TIMTA law: that all registered business entities are required to use the BIR Electronic Filing and Payment System in filing their tax returns and paying their tax liabilities; business entities availing of the incentives must file with their IPAs, a complete annual tax incentives report of their income-based tax incentives, VAT and duty exemptions, deductions, credits or exclusions from the tax base as required by the IPA concerned, within 30 days from the statutory deadline for filing of tax returns and payment of taxes.
Likewise, the filing by the registered business entities of their tax incentive reports will be without prejudice to the right of the Bureau of International (BIR) and Bureau of Customs (BOC) to conduct assessment within the prescribed period under existing laws; and the TIMTA law will not be construed to diminish or limit, in whatever manner, the amount of incentives that IPAs may grant pursuant to their charters and existing laws, or to prevent, deter or delay the promotion and regulation of investment, processing of application for registration and evaluation of entitlement of incentives by IPAs; and non-compliance by the registered business entities with the reporting requirements would be subject to penalties, from a fine of P100,000.00 (1st violation), P500,000.00 (2nd violation) and cancellation of the registration (3rd violation);
TIMTA law is expected to pave the way to a more enticing business environment for investors and an overall improvement in doing business in the Philippines, especially inside this Freeport.