Tax reform to lift 6M Filipinos from poverty


DOF: Govt to bring PH at par with China, Thailand per capita gross income

Once the government-proposed tax reform program is in place, six million Filipinos may be freed from poverty, the Department of Finance (DOF) said on Tuesday.

Finance Secretary Dominguez 3rd said the program would help the Duterte administration realize its vision of reducing poverty incidence from 21.6 percent to 14 percent over the next six years.

The Philippines is now at a “critical juncture” where it can either choose the old and easier path of sustaining high growth accompanied by economic exclusion and high poverty rates, or the more challenging road toward reforms.

“Our mandate is to take on the more challenging path. Building on solid fundamentals, we must immediately bring relief to all Filipinos burdened with oppressive tax rates,” said Dominguez.

“At the same time, we must raise enough revenues to close the infrastructure gap that makes production costlier in our economy than in others in this region, as well as enough revenues to provide the social protection needed by our poor and vulnerable,” he added.

The government must take advantage of “the beneficial point in our country’s economic history,” characterized by abundant capital, low interest rates, benign inflation, high business confidence, impressive credit ratings and strong regional support, the DOF chief noted.

“This is the time to act boldly,” he said.

Over the next six years, the government intends to bring the Philippines on a par with China and Thailand in terms of per-capita gross national income.

“That translates into liberating 6 million Filipinos from the grip of poverty. We intend to transform our country from a lower middle-income to an upper middle-income economy. That will mean raising per-capita gross national income from $3,100 to $4,000 by 2022. That is the level of Thailand and China today after decades of sustained economic expansion in those economies,” Dominguez noted.

If the momentum is sustained, the Finance Secretary said that by “the end of this administration, the Philippines should be well on its way to eradicating poverty completely by 2040 or a generation hence.

“By that time, we should have moved into the ranks of the world’s advanced nations with a per-capita income of $12,000. This is where South Korea and Malaysia are at today,” he said.

To achieve these goals, the Philippines must sustain a growth rate of at least 7 percent annually for a generation, which can be done only if the economy shifts from consumption- to investment-led growth.

Dominguez noted the Philippines currently invests only 20 percent of its gross domestic product (GDP) while its high-growth neighbors invest between 30 percent and 40 percent.

“Studies show that in order to sustain high and inclusive growth, we need P1 trillion more in investment on top of the current P1.3 trillion. Expanded direct investments from our neighbors, a more aggressive public-private partnership program, and deepened social protection and human capital investments will ensure that,” the DOF chief said.

Such investment requires a series of revenue-enhancing packages, the first of which was submitted to the Congress in September under the DOF-proposed Tax Reform for Acceleration and Inclusion Act, which is expected to generate a net gain of P174 billion equivalent to 1 percent of the GDP in 2018.


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  1. Or , adopt HongKong’s simple taxation system and import duty-free structure as framed under the former UK governance. One only has to witness the tens of billions of dollars in realized SURPLUS fiscal revenues ALONE that HK gains, thereby proving that this method is effective. RP could also adopt an INDEPENDENT prosecuting body against corruption such as the HK ( ICAC ) that would go after practitioners of this heinous crime of economic sabotage. Furthermore, congress should enact a LAW which would make Graft and Corruption punishable by DEATH to strike FEAR into the hearts of crooks who sap the country of badly needed revenues that should otherwise be channelled towards national development that would benefit ALL Filipinos alike.

    1. High food price which around 15% of income – solution remove the 12% vat.
    2. high transportation cost around 20% of income – solution remove 12% vat.
    3. high electricity around 10% of income – solution remove 12% vat.
    4.high educational cost around 30% of income – solution nationalize all private owned schools.
    In other words remove the 12% vat on all the basic needs of the people such as food, public utilities, rental, medicine and charged the usual 2% of gross sale.