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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
The Tax Reform Program Impact on the People and the Economy 1 with - - PowerPoint PPT Presentation
The Tax Reform Program Impact on the People and the Economy 1 with - - PowerPoint PPT Presentation
The Tax Reform Program Impact on the People and the Economy 1 with the 99: A Forum on Tax Reform July 5, 2017 ROSEMARIE G. EDILLON Undersecretary National Development Office-Policy and Planning NEDA is 1 with the 99 In 2040, we will all
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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 action Long-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 society
2017- 2022 2023- 2028 2029- 2034 2035- 2040
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Competitive Enterprises Needed
Agriculture Housing and Urban Development Manufacturing Transport and Communication Tourism & Allied Services Financial Services
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Countryside Development Education services Health services
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More and Better In Infrastructure
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Adequate (qualit ity, , quantity, affordabili lity) Socia ial Services
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7/5/2017
“MALASAKIT” ENHANCING THE SOCIAL FABRIC “PAGBABAGO” REDUCING INEQUALITY “PATULOY NA PAG-UNLAD” INCREASING GROWTH POTENTIAL
Expand economic
- pportunities
Increase access to economic
- pportunities
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
Advance technology adoption Stimulate innovation
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
- f individuals
Reach for demographic dividend Accelerate human capital development 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
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PDP 2017-2022 Targets
Indicator Baseline Target 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
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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
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Tax Reform will support th the achievement of f th the Ambisyon 2040-Philippine Development Pla lan Goals and Str trategies.
Industry & Services Connectivity/Logistics Education/ Skills Dev’t. Housing/urban Dev’t. Agriculture Dev’t. Financial Inclusion Medical/Social Services
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BUILD! BUILD! BUILD!
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Adequate (qualit ity, , quantity, affordabili lity) Socia ial Services
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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 to Total Expenditure, Per Decile
Share of Fuel for Personal Tranpo to Total Expenditure, in percent
Source: PSA 2015 Family Income Expenditure Survey, NEDA Staff Estimates
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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 Expenditure Per Decile
Share of Softdrink Expenditure to Total Expenditure, in percent Source: PSA 2015 Family Income Expenditure Survey, NEDA Staff Estimates
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Mit itigating 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
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