SENATE Minority Floor Leader Franklin Drilon is pushing for rationalization of fiscal incentives to investors to address revenue leaks and increase government collections.
Drilon, in a weekly forum at the Senate, noted that billions of pesos are being lost due to tax and fiscal incentives given by the government.
In 2015, Drilon said that the government recorded P300 billion in foregone revenues due to incentives and revenue leaks, saying that there are 14 government agencies promoting investments by granting incentives.
“I pushed for Tax Incentive Management Transparency Act that is supposed to require reporting from the recipients of the incentives to provide data on the benefits of the incentives granted to them,” Drilon said.
Drilon cited a study that showed that in 2015, there was P300 billion foregone revenues from the tax incentives granted.
“The question is, what benefits the people get out of these incentives? All of these things must be studied. I believe it’s about time that we rationalize these incentives that we grant,” Drilon said.
He added: “Notwithstanding all these incentives, we still lagged behind in terms of foreign direct investment among Southeast Asian nations. “
Drilon downplayed apprehensions that the lack of incentives to investors may lead to flight.
“I don’t believe so. As long as the environment for doing business is favorable, they will not leave. What we should stop is taking advantage of the incentives which should no longer be there,” Drilon said.