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The Fiscal Incentives Review Board is looking to harmonize investor fees collected by investment promotion agencies from business enterprises they registered for tax incentives
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All IPAs have been asked to submit copies of fees they collected relating to the grant and administration of tax incentives, with details on their cost recovery and income generation
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Finance Secretary and FIRB Chairman Carlos Dominguez III wants IPA fees and charges evaluated and rationalized to ensure equity and shared responsibility by government and stakeholders
The Fiscal Incentives Review Board (FIRB) intends to harmonize investor fees collected by investment promotion agencies (IPA) from their respective registered business enterprises.
In view of this, the FIRB Secretariat has advised IPAs to submit copies of their respective fees relating to the grant and administration of tax incentives, with details of their cost recovery and income generation.
This harmonization initiative will adopt the principle under Office of the President Administrative Order No. 31, series of 2012, which mandates that the imposition of government fees and charges should be primarily for cost recovery, and should strike a balance between recovering the cost of services and the socio-economic impact of the imposition.
Department of Finance Assistant Secretary and FIRB Secretariat head Juvy Danofrata in a statement said this move was prompted by a directive from Department of Finance Secretary and FIRB Chairman Carlos Dominguez III on harmonizing the schedule of fees collected by IPAs.
The move is part of the FIRB’s expanded policymaking and oversight functions in the grant and administration of tax incentives under Republic Act No. 11534, or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
“The need to evaluate and rationalize fees and charges collected by the IPAs is to ensure that there is equity and shared responsibility between the government and its stakeholders,” Dominguez said in a recent DOF executive committee meeting.
“The evaluation of fees and charges are best coordinated with the stakeholders to ensure that the rates are just and reasonable,” he added.
The guidelines will be drafted based on a cost recovery principle subject to reasonable rate of return, while revenue implications will also be considered in the adoption of the guidelines for the setting of fees.
Danofrata emphasized that “regular consultations with the IPAs will be conducted, with their views and suggestions considered to ensure their schedule of fees and charges are uniform and equitable for all stakeholders.”
The FIRB is an inter-agency body created under Presidential Decree No. 776 on August 24, 1975 tasked originally to determine what tax should be withdrawn, revoked or suspended under certain fiscal parameters. Its powers and functions were enhanced under CREATE as part of its oversight mandate.
