DOF nixes bid to exempt PhilRice from taxes

MANILA, Philippines - The government is not in favor of granting tax exemptions to state-owned Philippine Rice Research Institute (PhilRice) as proposed by several lawmakers at the House of Representatives.

The National Tax Research Center (NTRC), an agency under the Department of Finance (DOF), said PhilRice could avail instead of tax subsidies from the government.

“The tax subsidy is a more practical alternative to the broad or outright grant of tax exemption to PhilRice. The use of tax subsidy is more precise and direct and adheres to fiscal transparency particularly in the use of government resources,” said NTRC executive director Lina Isorena in a position paper.

Isorena said Philrice has already availed of the tax subsidy provision through the Fiscal Incentives Review Board (FIRB) from 1990 to 1996 for importation of equipment, materials and supplies related to its rice research initiatives.

The proposed Philippine Rice and Cereals Research and Development Institute Act of 2009 seeks to expand, strengthen and rename PhilRice. The bill is authored by Reps. Pryde Henry Teves (Negros Oriental), Jocelyn Sy-Limkaichong  (Negros Oriental), George Arnaiz (Negros Oriental), Leonila Chavez (Butil party-list), Abraham Kahlil Mitra (Palawan), Victor Yu (Zamboanga del Sur) Jeci Lapus (Tarlac) and Victoria Sy-Alvarado (Bulacan).

The authors proposed that PhilRice be granted tax exemptions on the purchase of equipment and other materials here and abroad.

The bill also proposed that all real and personal properties registered to PhilRice shall be fully exempt from all forms of taxes, duties and fees including realty taxes, transfer taxes, gains taxes, value added taxes, customs duties and other import and export taxes.

Furthermore, the bill also wants that any donation, contribution, subsidy or financial aid made to PhilRice be exempt from taxes of any kind.

NTRC, however, said such broad coverage of exemption from all taxes, fees and duties granted to PhilRice can lead to policy issues.

On the other hand, the NTRC said it supports proposals to exempt from taxes donations to PhilRice as this could encourage more contributions.

NTRC also said that it supports proposals to expand and strengthen PhilRice but stressed that there is also a need for the government to increase investments related to proper irrigation and sustainable farm-based technology.