The World Bank voiced out concerns for a unified policy to make the Philippine tax system “simpler” and “transparent” to 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 other opportunities to expand in the country are restrained due to “many” and “complicated” tax system of the country.
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 disadvantage 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 nearing Congress 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 concern for the country’s taxation came to the assessment of the World Bank and economists that the Philippines’ 7-percent gross domestic product 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 the 7-percent growth 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 by intensive, simpler and transparent tax collection and system, as well as foreign direct investment flows in the country.
On Monday, the World Bank raised their Philippine GDP projections: 7-percent GDP growth for 2013 and 6.7 percent for 2014.
The increase in GDP trajectory was driven by the increased investment in infrastructure, domestic consumption, healthy banking system and strong macroeconomic fundamentals of the country which make the Philippines resistant to external shocks of established markets worldwide. KRISTYN NIKA M. LAZO