Friday, December 05, 2008 [ manilatimes.net ]
THE Department of Finance is opposing a proposal that exempts state-run Laguna Lake Development Authority (LLDA) from paying taxes.
Finance Undersecretary Gil Beltran said the exclusion of LLDA from payment of all taxes, licenses, fees, imposts and duties may give rise to problems, policy issues, and difficulties in implementation and interpretation.
He said it might also create opportunities in the exercise of discretion by the Bureau of Internal Revenue as well as leakages and abuses.
Since the LLDA is engaged in agricultural, industrial, commercial and other activities, Beltran said the issue of unfair competition and unlevel playing field might be raised by the private sector engaged in the same business undertakings.
“The grant of exemption from local taxes goes against the principle of enhancing local fiscal autonomy, which intends to make local government units more self-reliant and capable of financing the requirement of their own development initiatives,” the Finance official said.
At present, the Social Security System, Government Service Insurance System, Philippine Health Insurance Corp. and the Philippine Charity Sweepstakes Office enjoy income tax exemption.
Instead of seeking tax exemption, Beltran said LLDA should be allowed to avail of the tax subsidy provided by the Fiscal Incentive Review Board.
“We recommend that the tax treatment of LLDA be aligned with the tax treatment of other government corporations other than those granted under the tax code,” he added.
The state-run firm was established in 1966 as a quasi-government agency that leads, promotes and accelerates sustainable development in the Laguna de Bay Region.
LLDA was originally exempted from all taxes but this privilege was withdrawn by Executive Order 93 in 1987.--Chino S. Leyco
