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1 DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. By 2022 at least - PowerPoint PPT Presentation

Oct 15, 2022 •669 likes •930 views

DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 1 DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. By 2022 at least 3,500 3,996 3,500 12,376 USD USD USD USD 2 DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Progress in achieving the 10-point

  1. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 1

  2. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. By 2022 at least 3,500 3,996 3,500 12,376 USD USD USD USD 2

  3. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Progress in achieving the 10-point socioeconomic agenda is advancing strongly. 3

  4. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 1. Macroeconomic policies Credit rating upgrade means upgrading everyone’s life. Philippine credit rating 0 0 BBB+ 0 BBB Investment BBB- 0 grade BB+ 0 BB 0 BB- 0 0 7 Source: S&P

  5. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 3. Ease of doing business 15

  6. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 4. Infrastructure spending 17

  7. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 5. Rural development Rice Competitive Enhancement Fund (RCEF) Farmers benefit from the Rice Competitive Enhancement Fund (RCEF) with a 10 billion peso annual appropriation for the next six years. Photo: IRRI Photo: IRRI Photo: IRRI 21

  8. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 7. Human capital development These are some of the specific benefits that Filipinos will receive under UHC if fully implemented. 23

  9. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. 9. Social protection programs 24 photos from DSWD, IRRI

  10. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Some economic priorities in next three years 2. 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: Package 2 Package 4 Package 2+ Package 3 Corporate income tax Passive income Alcohol and Property valuation and incentives reform and financial taxes e-cigarette excise 36

  11. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Package 2 Corporate income tax and incentives reform 56

  12. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. The Philippines has the highest corporate income tax rate in the ASEAN region, yet it has low efficiency. • For instance, Thailand collects CIT equivalent to around 4 percent of GDP on a 20 percent CIT rate, or an efficiency of 20 percent. • Meanwhile, the Philippines collects CIT equivalent to 3.7 percent 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. 57 Source: Asian Development Bank and PWC

  13. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Lower corporate income tax The President may advance the scheduled reduction in the CIT rate when adequate savings are realized from the rationalization of fiscal incentives.

  14. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. We have a complex tax incentives system. We grant the most generous fiscal incentives since they are in lieu of all taxes and given forever . 14 investment promotion - agencies 136 investment incentive - laws and 200 non- investment incentive laws 546 ‘ecozones’ and freeports - Source: Individual country finance agencies and investment promotion offices. 59

  15. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Resulting in huge inequity and “wasted” incentives ● Firms with no incentives pay the regular rate of 30% of net taxable income ● Firms with incentives pay between 6% and 13% effective tax (2.8% of 2017 GDP) (2% of 2017 GDP) For example, almost all of the 90,000 SMEs pay the regular 30% rate. Source: DTI and TIMTA 60

  16. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Package 2 Fair and accountable tax incentives system 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. 61

  17. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Package 2+ Tobacco and alcohol excise taxes 62

  18. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Ensure financial Discourage excessive Ensure a healthy, world sustainability for health alcohol, tobacco, e- class workforce expenditure programs cigarettes, and sweetened beverages consumption for better health and social outcomes, especially among the youth and poor 63

  19. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Funding gap before passage of the tobacco tax bill 64

  20. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Tax rates under Enrolled bill on tobacco tax Heated tobacco products for Cigarettes for pack of 20 pack of 20 (in pesos per pack) (in pesos per pack) 66

  21. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Tax rates under Enrolled bill on tobacco tax Vapor products (in pesos) 67

  22. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. DOH- DOF and Sen. Pacquiao’s proposal on alcohol tax Fermented liquors – increase specific tax per liter (in pesos) : Current 2024 2020 2021 2022 2023 (2019) onwards NRP (excluding excise and VAT) 24.4 10 percent per liter of volume capacity indexation Brewed and sold every year at 40 45 50 55 thereafter microbreweries 34.07 or small (60.5 in establishments, 2024) regardless of the NRP 72

  23. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. DOH- DOF and Sen. Pacquiao’s proposal on alcohol tax Distilled spirits – increase ad valorem and specific tax (in pesos) : Current 2020 2021 2022 2023 2024 onwards (2019) Ad valorem rate on net 20 25 retail price (in percent) 10 percent Specific tax indexation per proof 23.4 40 45 50 55 every year liter thereafter (in pesos) (60.5 in 2024) 73

  24. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Reform as bridging the future 109 109 Source: https://www.pinterest.com/explore/social-stratification/

  25. DRAFT FOR DISCUSSION. SUBJECT FOR CHANGE. Thank you 111 Photo: IRRI Photos: IIRI

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