[ Malaya.com.ph ] November 29, 2010
In an effort to increase the government’s revenues, the Department of Finance (DOF) wants Republic Act 10026, the law that gives income tax exemption and condonation of past year’s tax deficiencies to local water districts (LWDs), repealed.
Once RA 10062 is repealed, the DOF said, the government stands to gain P830 million.
"It is already enough that LWDs have enjoyed tax and duty exemption privileges in the past under PD 198 and again, under RA 7109," the Finance department said.
DOF said LWDs, as government-owned and controlled corporations, should operate just like private enterprises whose viability is not dependent on government subsidy like the grant of tax exemptions.
"If, as they claim, they are experiencing financial difficulties now, the provisions of the Tax Code on net operating loss carry-over and compromise of tax warranted by one’s financial position are deemed sufficient to address their problem," DOF said.
DOF said the condonation of unpaid taxes of LWDs to the national government weakens the government’s policy of instilling financial discipline among GOCCs.
"(It also) deprives government of a legitimate source of revenue," DOF said.
Based on BIR data, the total assessed taxes from various LWDs for the years 2006, 2007 and January to August 2008 amounted to P321.6 million of which P224.28 million account for income tax.
_______________________________________________________________
