Tax Breaks Need to be Restricted
September 12, 2013 Taxation in Philippines
MANILLA – Tax breaks in the Philippines should be restricted to a maximum time frame of five years, and should only be given to innovative enterprises.
In a statement made on September 11th the Commissioner of the Bureau of Internal Revenue of the Philippines Kim Henares said that too many tax breaks are currently being given away to already established businesses, and she called for the favorable tax treatments to be offered exclusively to “pioneering” enterprises and to businesses focused on exporting goods.
According to the Commissioner, at the moment numerous large multinational businesses in the Philippines are receiving unwarranted tax breaks and allowances, benefiting foreign investors without boosting the national economy.
Kim Henares suggests that tax breaks should now be restricted to “pioneering” enterprises which are preparing to offer new and innovative products, services or research.
The tax breaks should also be restricted to the initial growth phase of the business, and are to be capped at a maximum of five years.
The Commissioner explained that offering tax allowances to non-pioneering enterprises reduces government revenues, skews market conditions, and diminishes the opportunities for new and innovative businesses to successfully begin operations.
Photo by PHBascon