About P43 billion in potential annual government revenues are being lost due to corporate abuse of transfer pricing, the Finance department said on Tuesday as it again pushed for approval of a law streamlining investor incentives. A Finance department and Bureau of Internal Revenue analysis, he claimed, showed that tax leakages from transfer pricing schemes had ballooned to P42.7 billion in 2015 from P25.9 billion in 2011. The analysis covered 5,155 firms, of which 558 possibly abused the transfer pricing scheme to manipulate tax payments, Chua added. Already passed by the House of Representatives and dubbed as the Tax Reform for Attracting Better and Higher Quality Opportunities (Trabaho) Act, Package 2 calls for the gradual lowering of corporate income taxes and the modernization of fiscal incentives. It has yet to leave the committee level in the Senate, where legislators—wary over the impact of last year’s Tax Reform for Acceleration and Inclusion (Train) law—have raised concerns over unintended consequences such as job losses.

Source: Manila Times October 02, 2018 16:30 UTC