Investments News Analysis Reforms

A taxing problem

World Bank's 2017 Doing Business Report Philippines and ASEAN_Part 7: Paying taxes
World Bank's 2017 Doing Business Report Philippines and ASEAN_Part 7: Paying taxes

In the World Bank’s 2017 Doing Business Report, under the category ‘Paying Taxes,’ the Philippines is rated 115th out of 190 countries and 6th overall out of the 10 member states of the Association of Southeast Asian Nations (Asean).

The statistic that really stands out, however, is that the tax liability of a Philippine-registered company is the highest of any country in the Asean region. This is how that stacks up. Brunei, 8.7%; Singapore, 19.1%; Cambodia, 21%; Laos, 26.2%; Indonesia, 30.6%; Myanmar, 31.3%; Thailand, 32.6%; Vietnam, 39.4%; Malaysia, 40.0%; Philippines, 42.9%. Clearly, that’s not helpful in attracting new businesses to the archipelago.

Thankfully, the Philippine Government will be addressing this as it pushes ahead with a tax-reform package that will include a cut in the corporate tax rate and adjust the fiscal incentives for investors, though we don’t have clear details of figures at this stage. Those measures will come in Phase 2 of the Department of Finance’s proposed Comprehensive Tax Reform Program; the first phase of which – the Tax Reform for Acceleration and Inclusion – has passed through the House of Representatives and is now ready for a Senate reading.

3 Comments