TAG: Asia
Tax reform has been front and centre of President Rodrigo Duterte’s policy agenda since the combative former mayor of Davao City was elected to the Philippines’ highest office in 2016. Indeed, enhanced revenue mobilisation from a more efficient and effective tax system is seen by the Duterte administration as a key component of plans to address nationwide infrastructure gaps and deliver ambitious social programmes such as universal health care. While these big-picture policies should help foster inclusive and sustainable economic growth over the long term, the tax reforms that have been pushed through so far have been met with mixed reactions from the business community and the general public.
The results of the latest OBG Business Barometer: Philippines CEO Survey shed light on how President Rodrigo Duterte’s tax reform packages have been received by the business community. Effective since January 1, 2018, the Tax Reform for Acceleration and Inclusion (TRAIN) programme has exempted many low-wage workers from income tax but was also partly blamed for causing inflationary pressures that year. Of the almost 100 C-suite executives that were surveyed, some 35% said TRAIN had affected local business conditions in a negative way, 33% gave a neutral response, 29% responded that it had a positive impact and 1% opted for very positive.