Caution Urged on Tax Reform in Philippines

September 4, 2014 Taxation in Philippines

Tax Reform in PhilippinesMANILA – While it is agreed that taxes in the Philippines are growing too fast, caution has been urged on implementing any tax cuts, as the reduction may cause significant revenue drops.

On September 3rd the undersecretary of the Department of Finance of the Philippines Jeremias Paul urged the members of the national House Ways and Means committee to re-examine and take a holistic approach to any tax reforms to be enacted in the country, claiming that the currently proposed round of income tax rate reductions may significantly reduce the country’s GDP.

Jeremias Paul claimed that if income tax rates were reduced, as is currently proposed, the loss in revenues would amount to between 0.3 percent and 1.5 percent of the national level of GDP.

The undersecretary’s comment come only days after the national Congress agreed to fast-track moves to reduce the rate of personal income taxes by as much as 15 percent.

However, while warning that any changes to taxes need to be thoroughly examined, the undersecretary also conceded that the current tax system is “unfair and inequitable”, as the growth of tax rates have outpaced the growth of incomes levels for most taxpayers.

Photo By: ken wilson lee