The Tax Reform Program Impact on the People and the Economy
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The Tax Reform Program Impact on the People and the Economy ROSEMARIE G. EDILLON Undersecretary National Development Office-Policy and Planning 1 with the 99: A Forum on Tax Reform July 5, 2017
Transcript of The Tax Reform Program Impact on the People and the Economy
The Tax Reform Program Impact on the People and the Economy
ROSEMARIE G. EDILLON
Undersecretary
National Development Office-Policy and Planning
1 with the 99: A Forum on Tax ReformJuly 5, 2017
1 with the 99NEDA is
AmBisyon Natin 2040
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“In 2040, we will all enjoy a stable and comfortable lifestyle, secure in the knowledge that we have enough for our daily needs and unexpected expenses, that we can plan and prepare for our own and our children’s future. Our family lives together in a place of our own, and we have the freedom to go where we
desire, protected and enabled by a clean, efficient, and fair government."
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From vision to actionLong-term Developmental Goals
By 2040, Philippines will be a
• prosperous,
• predominantly middle-class
society
• where no one is poor;
Our peoples will
• live long and healthy lives,
• be smart and innovative and
• live in a high-trust society2017-2022
2023-2028
2029-2034
2035-2040
Competitive Enterprises Needed
AgricultureHousing and
Urban Development
Manufacturing
Transport and
Communication
Tourism &
Allied ServicesFinancial Services
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Countryside
Development
Education services
Health services
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More and Better Infrastructure
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Adequate (quality, quantity, affordability) Social Services
7/5/2017
“MALASAKIT”ENHANCING THE SOCIAL FABRIC
“PAGBABAGO”REDUCING INEQUALITY
“PATULOY NA PAG-UNLAD”INCREASING GROWTH POTENTIAL
Expandeconomic
opportunities
Increase accessto economic
opportunities
TO LAY DOWN THE FOUNDATION FOR INCLUSIVE GROWTH, A HIGH-TRUST AND RESILIENT SOCIETY, AND A GLOBALLY-COMPETITIVE KNOWLEDGE ECONOMY
MATATAG, MAGINHAWA AT PANATAG NA BUHAY
Advancetechnologyadoption
Stimulateinnovation
IMPLEMENT STRATEGIC TRADE AND FISCAL POLICY, MAINTAIN MACROECONOMIC STABILITY, AND PROMOTE COMPETITION
Ensure people-centered, clean, and efficient governance
Pursue swift and fair administration of justice
Promote Philippine culture and awareness
Reduce vulnerability of individuals
Reach for demographicdividend
Acceleratehuman capitaldevelopment
Ensure peace and security Accelerate strategic infrastructure development
Ensure safety and build resilience
Ensure ecological integrity, clean and healthy
environment
2022
2040
PDP 2017-2022 Overall Strategic Framework
PDP 2017-2022 Targets
Indicator BaselineTarget by
2022
Per capita income (US$ PPP, Atlas Method) 3,550 (2015) 5,000
Human development index Medium level High level
Poverty incidence in rural areas (%) 30 (2015) 20
Poverty incidence overall (%) 21.6 (2015) 13-15
Subsistence incidence (%) 8.1 (2015) 5
Unemployment rate (%) 5.5 (2016) 3-5
Youth unemployment rate (%) 11 (2016) 8
Underemployment rate in AONCR (%) 19.7 (2016) 16-18
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Tax Reform Program
• Simpler, fairer and more efficient tax system
✓ Progressive income tax schedule
✓ Corrects horizontal and vertical inequities
✓ Lower personal income tax rates and broader base
• Provides additional revenues
• Sustainable source of financing for public infrastructure and
social services
Country Individual Top Tax Rate Top Tax Bracket
(in US Dollars)a/
Singapore 22 231,481.5
Malaysia 28 232,700.0
Indonesia 30 35,000.0
Philippines 32 10,000.0
Thailand 35 146,995.0
a/ Converted using the prevailing exchange rate (National Currency/US$) as of July 3, 2017
Source: Worldbank for the GDP per capita and KPMG database (https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/individual-
income-tax-rates-table.html)
Top Tax Base in selected ASEAN countries
Tax Reform will support the achievement of the Ambisyon 2040-Philippine Development Plan Goals and Strategies.
Industry & Services Connectivity/Logistics Education/ Skills Dev’t. Housing/urban Dev’t.
Agriculture Dev’t. Financial Inclusion Medical/Social Services
BUILD! BUILD! BUILD!
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Adequate (quality, quantity, affordability) Social Services
1.62
0.31
0.57
0.81
1.02
1.01
1.05
1.16
1.27
1.60
2.75
0.00 0.50 1.00 1.50 2.00 2.50 3.00
Total
First decile
Second decile
Third decile
Fourth decile
Fifth decile
Sixth decile
Seventh decile
Eighth decile
Ninth decile
Tenth decile
Share of Fuel for Personal Transportation Expenditure toTotal Expenditure, Per Decile
Share of Fuel for Personal Tranpo to Total Expenditure, in percent
Source: PSA 2015 Family Income Expenditure Survey, NEDA Staff Estimates
0.38
0.41
0.46
0.50
0.48
0.49
0.47
0.45
0.41
0.36
0.26
0.00 0.10 0.20 0.30 0.40 0.50 0.60
Total
First decile
Second decile
Third decile
Fourth decile
Fifth decile
Sixth decile
Seventh decile
Eighth decile
Ninth decile
Tenth decile
Share of Softdrink Expenditure to Total ExpenditurePer Decile
Share of Softdrink Expenditure to Total Expenditure, in percent
Source: PSA 2015 Family Income Expenditure Survey, NEDA Staff Estimates
Mitigating Measures
Targeted Transfers
• Targeted cash transfers (subsidy for the poor and vulnerable)
• Pantawid Pasada (subsidy for PUVs)
• Pantawid Kuryente (subsidy for SPUG areas)
• PUV Modernization Program
• Social welfare card/national ID
1 with the 99NEDA is
