The World Bank said that the Philippines needs a unified policy to make its tax system “simpler” and “transparent” to help attract business opportunities that would further raise and sustain the country’s economic performance.
Rogier van den Brink, World Bank Philippines lead economist, said that other foreign investors that would wish to put up businesses or expand in the country are restrained due to the “many” and “complicated” tax system of the Philippines.
Van den Brink also told reporters that tax rates among businesses should also be looked at and be uniform as “other firms also feel that they have disadvantages compared to others because they don’t get the tax rates that other firms get.”
“Government should really start looking at the administration of the taxes first and assessing them . . . Basically making taxation simple, closing loopholes, [and]by looking at tax rates,” van den Brink said, referring to the Congress’ upcoming discussion of the Philippine taxation sometime this year.
“We haven’t singled out a tax rates policy, but we think the first step is to make taxes system simpler and transparent,” the World Bank economist said.
The country’s taxation came to the assessment of the World Bank and economists because the Philippines gross domestic product (GDP) growth is not enough for the country to grow in an inclusive manner.
According to the World Bank, the Philippines should maintain or even surpass 7-percent growth rates to be able to create more jobs and make growth inclusive. The financial institution also noted that the country would need “more resources” other than government funds for growth, including foreign direct investments.
On Monday, the World Bank raised its Philippine GDP projections: 7-percent GDP growth for 2013, and 6.7 percent for 2014.
The projected increase in GDP will be driven by increased investment in infrastructure, domestic consumption, healthy banking system and strong macroeconomic fundamentals, which make the Philippines resistant to external shocks from established markets worldwide.