Fiscal Incentives - EO 93 (GOCCs)

This law generally withdrew the tax and duty privileges of government and private entities.

In lieu of the withdrawn tax and duty exemption of government entities, the grant of tax subsidy was introduced and institutionalized by the said EO. Under this system, an entity is granted tax subsidy, chargeable against the General Appropriations Act (GAA), to be used as payment for its tax and duty
obligations. The withdrawal of tax exemptions was deemed essential because of the need to generate more revenues for economic development purposes.



In addition, the removal of tax exemptions also served as a safety measure to provide check and balance in promoting fiscal transparency and discipline in the allocation of scarce government resources. This was in line with the government’s vision to optimize the use of its scarce resources in a more efficient, effective and economical manner while not undermining the welfare and interest
of the public.

The Fiscal Incentives Review Board (FIRB), originally created under the PD 776, implements the tax subsidy provisions for government corporations based on certain guidelines.

Pursuant to Section 16 (c), General Provisions of RA 10717 or the 2016 GAA, the tax expenditures subsidy granted by the FIRB shall be given to government–owned and/or –controlled corporations (GOCCs), the Armed Forces of the Philippines Commissary and Exchange Services (AFPCES),
the Philippine National Police Service Store System (PNPSSS) and the Procurement Service Exchange Marts or PX Marts in accordance with EO 93, as amended, including those for tax obligations assumed by GOCCs pursuant to a valid agreement.