Article 92p. 92

NATIONAL INTERNAL REVENUE CODE TAXATION, TARIFF and CUSTOMS LAWS

Corporation (PPMC), Bataan Technology Park, Inc. (BTPI),

Cagayan Economic Zone Authority (CEZA), Zamboanga

City Special Economic Zone Authority (ZCSEZA), Phividec

Industrial Authority (PIA), Aurora Pacific Economic Zone

and

Freeport

Authority

(APECO),

Authority

of

the

Freeport Area of Bataan (AFAB), Tourism Infrastructure

and Enterprise Zone Authority (TIEZA), and ail other

similar authorities that may be created by law in the

future;

b. Tax incentives shall refer to fiscal incentives such as

those which come in the form of income tax holidays

(ITH), exemptions, deductions, credits or exclusions from

the tax base, as provided by law, to registered business

entities; and

c. Registered business entity shall refer to any individual,

partnership, corporation, Philippine branch of a foreign

corporation, or other entity incorporated and/or organized

and existing under Philippine laws and registered with an

IPA.

SECTION 4. Filing of Tax Returns and Submission of Tax

Incentives Reports. — All registered business entities are

required

to file their tax returns and pay their tax

liabilities, on or before the deadline as provided under the

National Internal Revenue Code (NIRC), as amended,

using the electronic system for filing and payment of

taxes of the Bureau of Internal Revenue (BIR).

For registered business entities availing of incentives

administered

by

the

IPAs, they shall file with their

respective IPAs a complete annual tax incentives report of

their income-based tax incentives, value-added tax and

duty exemptions, deductions, credits or exclusions from

the tax base as provided in the charter of the IPA

concerned, within thirty (30) days from the statutory

deadline for filing of tax returns and payment of taxes.

The IPAs shall, within sixty (60) days from the end of the

statutory deadline for filing of the relevant tax returns,

submit to the BIR, their respective annual tax incentives

reports based on the list of the registered business

entities who have filed said tax incentives report.

The details of the tax incentives reports, as provided in

the

preceding

paragraphs, shall be provided in the

implementing rules and regulations (IRR) of this Act.

The foregoing provisions shall be without prejudice to the

right of the BIR and the Bureau of Customs (BOC) to

conduct

assessment

within

the

prescribed

period

provided in the NIRC, as amended, and the Tariff and

Customs Code of the Philippines (TCCP), as amended,

respectively.

SECTION 5. Monitoring of Tax Incentives. — The BIR and

the BOC shall submit to the Department of Finance

(DOF), notwithstanding any law to the contrary: (a) the

tax and duty incentives of registered business entities as

reflected in their filed tax returns and import entries; and

(b) actual tax and duty incentives as evaluated and

determined by the BIR and the BOC.

The DOF shall maintain a single database for monitoring

and analysis of tax incentives granted.

For purposes of monitoring and transparency, the DOF

shall

submit

to

the

Department

of

Budget

and

Management (DBM) the aggregate data on a sectoral

and per industry basis of: (1) the amount of tax incentives

availed by registered business entities; (2) the estimate

claims

of

tax

incentives

immediately

preceding the

current year; (3) the programmed tax incentives for the

current year; and (4) the projected tax incentives for the

following year. Such information shall be given to the

Oversight Committee created under Section 9 of this Act.

The aforesaid data shall be reflected by the DBM in the

annual Budget of Expenditures and Sources of Financing

(BESF), which shall be known as the Tax Incentives

Information (TII) section: Provided, That the TII shall be

limited to the aggregate data related to incentives availed

of

by

registered

business

entities

based

on

the

submissions

of

the

DOF

and

the

concerned

IPAs,

categorized by sector, by IPA and type of incentive.

Nothing in this Act shall be construed to diminish or limit,

in whatever manner, the amount of incentives that EPAs

may grant pursuant to their charters and existing laws; or

to prevent, deter, or delay the promotion and regulation

of

investments,

processing

of

applications

for

registrations, and evaluation of entitlement of incentives

by IPAs.

SECTION

6.

Conduct

of

Cost-Benefit

Analysis

on

Investment Incentives. — The National Economic and

Development Authority (NEDA) is mandated to conduct

cost-benefit analysis on the investment incentives to

determine the impact of tax incentives on the Philippine

economy.

For this purpose, all heads of the IPAs shall submit to the

NEDA

the

aggregate

tax

incentives,

based

on

the

submissions of registered business entities as provided in

Section 4 of this Act, and aggregate investment-related

data, both on a sectoral or per industry basis, which may

include,

but

not

limited

to,

investment

projects,

investment cost, actual employment and export earnings.

SECTION 7. Penalties for Noncompliance with Filing and

Reportorial Requirements. — Any registered business

entity which fails to comply with filing and reportorial

requirements with the appropriate IPAs and/or which fails

to show proof of filing of tax returns using the electronic

system for filing and payment of taxes of the BIB shall be

imposed the following penalties:

a. First (1st) violation — payment of a fine amounting to

one hundred thousand pesos (P100,000.00);

b. Second (2nd) violation — payment of a fine amounting

to five hundred thousand pesos (P500,000.00); and

c. Third (3rd) violation — cancellation of the registration of

the registered business entity.

Provided, That if the failure to show such proof is not due

to the fault of the registered business entity, the same

shall not be a ground for the suspension of the ITH and/or

other income-based tax incentives availment.

Any government official or employee who fails without

justifiable reason to provide or furnish the required tax

incentives report or other data or information as required

under this Act shall be penalized, after due process, by a

fine equivalent to the official’s or employee’s basic salary

for a period of one (1) month to six (6) months or by

suspension from government service for not more than

one (1) year, or both, in addition to any criminal and

administrative penalties imposable under existing laws.

SECTION 8. Funding. — Such amount necessary to carry

out the implementation of this Act shall be sourced from

the current General Appropriations Act (GAA).

SECTION 9. Joint Congressional Oversight Committee. —

A

Joint

Congressional

Oversight

Committee,

herein

referred

to

as

the

Oversight

Committee,

shall

be

constituted in accordance with the provisions of this Act.

The Oversight Committee shall be composed of the

respective Chairpersons of the Committees on Ways and

Means of the Senate and of the House of Representatives

and four (4) additional members from each House, one of

whom shall be the Chairperson of the Senate Committee

on Trade, Commerce and Entrepreneurship and the

Chairperson of the House Committee on Trade and

Industry to be designated by the Senate President and

the Speaker of the House of Representatives, respectively.

The Oversight Committee shall monitor and ensure the

proper implementation of this Act.

SECTION 10. Implementing Rules and Regulations. —

The Secretaries of the DOF and the Department of Trade

and

Industry

(DTI),

in

coordination

with

the

NEDA

Director-General, Commissioners of the BIR and BOC,

and heads of concerned IPAs, shall, within sixty (60) days

from the effectivity of this Act, promulgate rules and

regulations

to

faithfully

implement

the

intent

and

provisions of this Act: Provided, That the failure of the

Secretaries of the DOF and DTI to promulgate the rules

and regulations shall not prevent the implementation of

this Act upon its effectivity.

© Compiled by RGL

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