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DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
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DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
By 2022
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3,996USD
3,500USD
at least
12,376USD
3,500USD
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
Progress in achieving the 10-point socioeconomic agenda is advancing strongly.
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DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
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1. Macroeconomic policies
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Philippine credit rating
Source: S&P
Investmentgrade
Credit rating upgrade means upgrading everyone’s life.
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
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3. Ease of doing business
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
4. Infrastructure spending
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DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
Farmers benefit from the Rice Competitive Enhancement Fund (RCEF) with a 10 billion peso annual appropriation for the next six years.
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Rice Competitive Enhancement Fund (RCEF)
Photo: IRRIPhoto: IRRI
Photo: IRRI
5. Rural development
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
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7. Human capital development
These are some of the specific benefits that Filipinos will receive under UHC if fully implemented.
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
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9. Social protection programs
photos from DSWD, IRRI
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
Some economic priorities in next three years2. Pursue the remaining tax reform packages to make the tax system simpler, fairer,
and more efficient, while ensuring sustainable financing for the infrastructure program. Four major packages remain:
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Package 2
Corporate income tax and incentives reform
Package 3
Property valuation
Package 2+
Alcohol and e-cigarette excise
Package 4
Passive incomeand financial taxes
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
Package 2Corporate income tax and incentives reform
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DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
Source: Asian Development Bank and PWC
The Philippines has the highest corporate income tax rate in the ASEAN region, yet it has low efficiency.
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• For instance, Thailand collects CIT equivalent to around 4percent of GDP on a 20 percent CIT rate, or an efficiency of 20 percent.
• Meanwhile, the Philippinescollects CIT equivalent to 3.7percent of GDP on a 30 percent rate, or an efficiency of only 12.3 percent.
• Among the ASEAN5, the county is only ahead of Indonesia in terms of efficiency.
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
The President may advance the scheduled
reduction in the CIT rate when adequate savings
are realized from the rationalization of fiscal
incentives.
Lower corporate income tax
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
- 14 investment promotion agencies
- 136 investment incentive laws and 200 non-investment incentive laws
- 546 ‘ecozones’ and freeports
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We grant the most generous fiscal incentives since they are in lieu of all taxes and given forever.
Source: Individual country finance agencies and investment promotion offices.
We have a complex tax incentives system.
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
● Firms with no incentives pay the regular rate of 30% of net taxable income
● Firms with incentives pay between 6% and 13% effective tax
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For example, almost all of the 90,000 SMEs pay the regular 30% rate. Source: DTI and TIMTA
Resulting in huge inequity and “wasted” incentives
(2% of 2017 GDP)
(2.8% of 2017 GDP)
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
Fair and accountable tax incentives system
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Every peso granted as tax incentive is a peso off the budget that could have been spent for infrastructure, health, education, and
social protection that benefit all, and not only a few.
Package 2
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
Package 2+Tobacco and alcohol excise taxes
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DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
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Ensure financial sustainability for health expenditure programs
Discourage excessive alcohol, tobacco, e-
cigarettes, and sweetened beverages consumption
for better health and social outcomes,
especially among the youth and poor
Ensure a healthy, world class workforce
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
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Funding gap before passage of the tobacco tax bill
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
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Tax rates under Enrolled bill on tobacco tax
Cigarettes for pack of 20 (in pesos per pack)
Heated tobacco products for pack of 20
(in pesos per pack)
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
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Tax rates under Enrolled bill on tobacco tax
Vapor products (in pesos)
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
Fermented liquors – increase specific tax per liter (in pesos):
DOH-DOF and Sen. Pacquiao’s proposal on alcohol tax
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Current
(2019)2020 2021 2022 2023
2024
onwardsNRP (excluding excise and VAT) per liter of volume capacity
24.4
40 45 50 55
10 percent
indexation
every year
thereafter
(60.5 in
2024)
Brewed and sold
at
microbreweries
or small
establishments,
regardless of
the NRP
34.07
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
Distilled spirits – increase ad valorem and specific tax (in pesos):
DOH-DOF and Sen. Pacquiao’s proposal on alcohol tax
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Current
(2019)2020 2021 2022 2023 2024 onwards
Ad valorem rate on net retail price (in percent)
20 25
Specific tax
per proof
liter
(in pesos)
23.4 40 45 50 55
10 percent
indexation
every year
thereafter
(60.5 in 2024)
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
Reform as bridging the future
Source: https://www.pinterest.com/explore/social-stratification/109109
DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE.
Thank you
Photo: IRRIPhotos: IIRI
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