SIXTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
Second Regular Session 
) 
SENATE 
S.No. 2669 
'15 FEB 25 PS:1 0 
RE(,EIVEO BY: ,~ 
I 
Prepared by the Committee on Ways and Means with Senators Drilon, 
Recto and Angara as authors 
AN ACT 
INSTITUTING A SYSTEM FOR TAX INCENTIVES MANAGEMENT AND 
TRANSPARENCY, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
assembled: 
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SECTION 1. Title. - This Act shall be known as "The Tax Incentives Management and 
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Transparency Act (TIMTA)." 
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SECTION 2. Declaration of Policy. - It is hereby declared the policy of the State to 
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promote fiscal accountability and transparency in the grant and management oftax incentives by 
S 
developing means to promptly measure the government's fiscal exposure on these grants and to 
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enable the government to monitor, review and analyze the economic impact thereof and thereby 
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optimize the social benefit of such incentives. 
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SECTION 3. Definition of Terms. - As used herein, 
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(a) "Investment Promotions Agencies (IPAs)" shall refer to government entities created 
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by law, executive order, decree or other issuance, in charge of promoting 
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investments, administering tax and non-tax incentives, and/or overseeing the 
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. operations of the different economic zones and freeports in accordance with their 
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respective charters. These include the Board of Investments (BOI), Philippine 
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Economic Zone Authority (PEZA), Bases Conversion Development Authority 
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(BCDA), Subic Bay Metropolitan Authority (SBMA), Clark Development 
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Corporation (CDC), John Hay Management Corporation (JHMC); Poro Point 
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Management Corporation (PPMC), Bataan Technology Park, Inc. (BTPI), Cagayan 
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Economic Zone Authority (CEZA), Zamboanga City Special Economic Zone 
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Authority (ZCSEZA), Phividec Industrial Authority (PIA), Aurora Pacific Economic 
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Zone and Freeport Authority (APECO), Authority of the Freeport Area of Bataan 
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(AFAB), Tourism Infrastructure And Enterprise Zone Authority (TIEZA), and all 
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other similar authorities that may be created by law in the future. 
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(b) "Other Government Agencies" (OGAs) shall refer to national government agencies 
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other than IPAs which administer tax incentives of any kind granted by law to any 
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person, natural or juridical. 
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(c) "Tax Incentives" shall refer to fiscal incentives such as those which come in the form 
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of income tax holidays, exemptions, deductions, credits or exclusions from the tax 
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base as provided by law to registered business entities and qualified private 
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individuals or corporations. 
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(d) "Registered Business Entity" shall refer to any individual, partnership, corporation, 
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Philippine branch of a foreign corporation or other entity incorporated and/or 
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organized and existing under Philippine laws and registered with an IP A. 
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(e) "Qualified Private Individuals or Corporations" shall refer to any person, natural or 
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juridical, enjoying tax incentives as provided for under existing laws. 
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(f) . "Tax Incentives Tracking Program" shall refer to the single database which shall be 
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used by the Department of Finance (DO F), Bureau of Internal Revenue (BIR), 
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Bureau of Customs (BOC), IP As and OGAs in monitoring the incentives 
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administered by IP As or OGAs to registered business entities and qualified private 
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individuals or corporations, as the case may be. 
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SECTION 4. Monitoring of Tax Incentives. - The amounts pertaining to tax 
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incentives administered by IP As and OGAs to registered business entities and qualified private 
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individuals or corporations, as the case may be, shall be clearly specified in accordance with the 
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schedule prepared by the DOF. Tax incentives administered by the relevant IPAs and/or OGAs 
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shall be reflected in the Tax Incentives Information provided in Section 5 of this Act. For 
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purposes of this Act, tax incentives administered shall refer to tax incentives claimed by 
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registered business entities and qualified private individuals or corporations from IP As/OGAs, as 
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reflected in their tax returns. 
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SECTION S. Tax Incentives Information. - For purposes of monitoring and 
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transparency, a section shall be created in the annual Budget of Expenditures and Sources of 
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Financing (BESF), which shall be known as the Tax Incentives Information (TIl) section, under 
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which tax incentives administered by the IPAs and OGAs are accounted: Provided, That, only 
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aggregate data related to incentives availed of by registered business entities and qualified 
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private individuals and corporations shall be reflected in the TIL The following tax incentives 
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data shall be included in the TIl: (1) actual claims for at least one (1) full 
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year; (2) estimate claims immediately preceding the current year; (3) programmed for the 
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current year; and (4) projected tax incentives for the following year: Provided, That within two 
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(2) years from the effectivity of this Act, the DOF, BOC, BIR, IPAs and OGAs concerned are 
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mandated to reconcile and provide updated data on actual tax incentives administered in the 
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previous years to establish a comprehensive TIl system. 
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SECTION 6. 
Administration, Implementation, Reporting and Tracking of Tax 
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Incentives. - The IP As and OGAs concerned shall be responsible for the administration and 
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implementation of tax incentives to registered business entities and qualified private individuals 
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or corporations. An annual report shall be submitted by the registered business entities and 
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qualified private individuals or corporations to the respective IP As or OGAs, stating the amount 
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of tax incentives it availed of for the year and other relevant information that may be required, 
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such as, but not limited to, project profile, employment, investments made, and taxes, licenses 
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and fees paid. These reports, including the type and amount of tax incentives administered, shall 
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be consolidated and reflected in the TIl Report to be submitted to the DOF by the IP As or OGAs 
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within six (6) months from the deadline of filing oftax returns. 
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The DOF, together with the BIR and the BOC, shall create a Tax Incentives Tracking 
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Program of all tax incentives administered by the IP As and OGAs, monitor the incentives 
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granted, and submit an annual TIl Report to the President and to the Chairpersons of the 
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Committees on Finance and on Appropriations of the Senate and the House of Representatives, 
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respectively, as part of the annual BESF, copy furnished the Chairpersons of the Committees on 
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Ways and Means of both Houses of Congress, and the Chairpersons of the Committees on Trade 
21 
and Commerce of the Senate, and the Chairperson of the Committee on Trade, Commerce and 
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Entrepreneurship of the House of Representatives. 
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The Tax Incentives Tracking Program shall be used by the DOF, BIR and BOC to 
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monitor tax incentives granted by the IPAs and OGAs, project tax incentives for future years, 
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and to conduct an annual evaluation study to determine the impacts of the tax incentives on the 
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Philippine economy: Provided, That the monitoring function of the DOF, BIR and BOC shall 
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incorporate those registered business entities and qualified private individuals or corporations 
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whose incentives have expired in order to assess whether the same provide benefits that extend 
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beyond its prescribed duration. 
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SECTION 7. Non-compliance with Reportorial Requirements; Penalties. - The failure 
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of a registered business entity or qualified private individual or corporation to submit a complete 
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annual TIl Report shall be a ground for the suspension of the incentives being enjoyed for the 
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particular taxable year. Repeated violation shall be penalized with the cancellation of the 
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registration of the registered business entity or qualified private individual or corporation, subject 
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to the hnplementing Rules and Regulations (IRR) ofthis Act. 
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The erring registered business entity or qualified private individual or corporation shall 
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then be subject to the aforementioned 'penalties, the terms of and procedure for which shall be 
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prepared by the IP As and OGAs for inclusion in the IRR of this Act, in addition to the applicable 
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penalties provided for under the National Internal Revenue Code (NIRC) of 1997, as amended. 
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The DOF shall issue to the IP As or OGAs a notice of non-compliance with this Act and 
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its IRR, and direct the latter to explain its failure to comply and the actions it took, if any, to 
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address such failure. If the failure is attributable to the fault of a registered enterprise, the IP As or 
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OGAs concerned shall state such fact in its explanation, attach supporting documents, and cause 
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the issuance of a notice of violation of registration terms and conditions against the registered 
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enterprises. 
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Any government official or employee who fails without justifiable reason to provide or 
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furnish data or information, as required under this Act, shall be punished by a fine equivalent to 
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that official's or employee's basic salary for a period of one (1) month to six (6) months, or by 
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suspension from government service for not more than one (1) year, or both, at the discretion of 
15 
the competent authority, in addition to the applicable penalties provided for in Section 11 of R.A. 
16 
No. 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees. 
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SECTION 8. Implementing Rules and Regulations. - The Secretary of Finance, in 
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coordination with the DBM, DTI and NEDA, and in consultation with BIR and BOC and 
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concerned IP As and OGAs shall, within sixty (60) days from the effectivity of this Act, 
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promulgate rules and regulations to faithfully implement the intent and provisions of this Act: 
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Provided, That the failure of the Secretary of Finance to promulgate the said rules and 
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regulations shall not prevent the implementation ofthis Act upon its effectivity. 
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SECTION 9. Amending Clause. -
All other laws, decrees, executive orders, 
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administrative orders, rules and regulations or parts thereof which are inconsistent with the 
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provisions ofthis Act are hereby amended or modified accordingly. 
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SECTION 10. Separability Clause. - In the event that any provision of this Act is 
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declared unconstitutional or invalid, the other parts or provisions hereof not affected shall 
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continue to be in full force and effect. 
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SECTION 11. Effectivity. - This Act shall take effect fifteen (15) days after its 
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publication in a newspaper of general circulation in the Philippines or in the Official Gazette. 
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Approved, 
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