As defined in Republic Act (RA) 10708 or the Tax Incentives Management and Transparency Act (TIMTA), tax incentives (also known as investment tax expenditures) refer to fiscal incentives in the form of income tax holidays (ITH) and special income tax rate, exemptions such as on imports (i.e., customs duty and VAT exemptions), deductions, credits or exclusions from the tax base to registered business entities (RBEs). Registered members of the Cooperative Development Authority (CDA) also enjoy incentives on income tax, local VAT, and percentage tax as provided under RA 6938, as amended by RA 9520 or Philippine Cooperative Code. Moreover, RA 11534 or the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) provides for rationalization of fiscal incentives.
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