P61.5-B discrepancy noted in DTI, BIR figures on tax perks

The government reported a discrepancy of at least P61.5 billion in the amount of tax incentives granted by the Department of Trade and Industry (DTI) and the claims reported by the Bureau of Internal Revenue (BIR).

The Department of Finance (DOF) reported that it has been tracking the claims filed by registered businesses against the actual incentives approved by the DTI through its attached agencies.

Finance Secretary Margarito B. Teves said that for the period 2000 to 2004 alone, the total difference amounted to P61.5 billion, indicating that there were more claims filed with the BIR than there were actual awards made by the DTI.

Because of the magnitude of the discrepancy, Teves said the DTI had agreed to allow the BIR to conduct a post-audit of all the fiscal incentives so far granted by the DTI and match the records of claims filed with the bureau.

Trade and Industry Secretary Peter Favila said the DTI and the DOF have reached an agreement to allow the BIR to audit the various fiscal incentives being administered by the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA).

According to Favila, the effort would at least minimize the notorious loopholes in the government’s fiscal incentives program for investors and prevent future abuses by generating uniform data across all agencies concerned.

Teves said that since 2000, the DOF has been tracking “disturbing” discrepancies between the amount of incentives being granted by the BOI and the PEZA compared with what was being reported and claimed from the BIR.

In 2000, according to Teves, the difference between the income tax holidays being claimed by firms registered with the BOI and the PEZA amounted to P1.9 billion, with claims totaling P4.4 billion when the incentives granted actually amounted to only P2.5 billion.

In 2001, Teves said the tax holidays granted was actually higher than claims filed with the BIR but by 2002, the difference had ballooned to P38 billion with total claims amounting to P46.6 billion against actual income tax holidays granted which amounted to only P8.6 billion.

In 2003, Teves said the income tax holiday claims amounted to P25.1 billion when the actual amount granted was only P6.7 billion for a difference of P18.3 billion.

Finally in 2004, Teves reported the government noted a P9.8 billion discrepancy between claims amounting to P19.4 billion against the actual incentives granted which amounted to only P7.6 billion.

Favila said the difference between the two sets of data would have to be sorted out in the next few months but in the meantime, the two agencies have agreed to adjust the procedures for the granting of incentives and filing of claims with the BIR.

Under the agreement signed by the DTI and the DOF, claims being filed by registered enterprises would now require the inclusion of an actual certification from either the BOI or PEZA to allow the BIR to conduct an on-the-spot table audit. –Des Ferriols, The Philippine STAR