2012年-IMF国际货币组织全球_Philippines_Technical_Assistance_Report_on_Road_Map_for_a_Pro_71页_1mb

Summary of the Philippines: Technical Assistance Report on Road Map for a Pro-Growth and Equitable Tax System

Core Content

This report is a technical assistance document prepared by the International Monetary Fund (IMF) Fiscal Affairs Department (FAD) in November 2011, following a mission to the Philippines from September 6–19, 2011. The mission aimed to provide advice on a comprehensive tax reform strategy that would increase tax revenue by 3.0 percent of GDP by 2016. The recommendations are based on the 2010 FAD mission and the recent World Bank mission, with the objective of improving competitiveness, simplifying the tax system, enhancing equity, and increasing effectiveness.

Main Recommendations

Tax Incentives

• Rationalization of Incentives: The mission emphasized the need to simplify and rationalize the current tax incentive regime, which is considered overly generous and complex.
• Preferred Reform Options:
  • Option 1: Remove income tax holidays and the 5% tax on gross income earned (GIE), reducing the corporate income tax (CIT) rate to at least 25%.
  • Option 2: Significant rationalization of incentives, including limiting the duration of incentives to no more than 10 years, and introducing a sunset clause of no more than 5 years for all incentive laws.
• DOF Proposal: The Department of Finance (DOF) has proposed a rationalization plan that includes three rate options, which is a positive step but could be further improved.
• Compliance and Revenue Loss: The current regime allows for tax planning opportunities and non-compliance, which could be mitigated by rationalizing incentives.

Corporate Income Tax (CIT) Issues

• Taxation of Capital Gains: The mission recommends taxing capital gains on the sale of shares and real estate not used in the company’s business as ordinary income, aligning with international practices.
• Transfer Pricing and Thin Capitalization: These rules should be introduced to prevent profit shifting and ensure fair taxation of multinational enterprises (MNEs).
• Cooperatives: The current tax treatment of cooperatives is too generous and may lead to revenue leakage. Cooperatives should be subject to CIT and VAT, with distributions to members taxed via withholding tax. Small cooperatives with turnover below the VAT threshold could be taxed at a 3% rate or under a de minimis rule to reduce administrative burden.

Excise Taxes

• Revenue Loss: Excise revenue has declined due to lack of indexation, outdated pricing, and reduced excise on petroleum products. This has resulted in a loss of 1.8% of GDP since 1997.
• DOF Excise Reform Bill: The bill proposes a unitary excise rate and automatic indexation to inflation, which is in line with the 2010 FAD recommendations.
• Adjustments Suggested:
  • Excise rates on tobacco and alcohol should be adjusted to reach the 1997 excise-to-GDP ratio.
  • Adjustments should start by the beginning of 2012 and be completed in three years.
  • A unified specific rate on tobacco products should be introduced in the medium term.
  • The tax burden on cigarettes should not fall below 50% of the retail price.
• Petroleum Excises: Excise on diesel should be introduced, and gasoline excise rates should be increased after the sin tax reform bill is approved.
• Telecom Excises: A study is recommended on the economic and revenue impact of an excise on SMS and other mobile phone services. A low rate applied to a broad range of services could mitigate regressive effects.

Personal Income Tax (PIT)

• Indexation of Rate Schedule: The PIT rate schedule should be indexed to inflation since 1997 to maintain progressivity and reduce the number of brackets.
• Optional Standard Deduction (OSD): The OSD should be limited to those whose sales/receipts are below the VAT threshold. Alternatively, it could be reduced to 20% or less, as proposed in House Bill No. 3992.
• Withholding Tax on Interest: A unified 20% withholding tax rate should be applied to all interest income, including that from deposits with long maturity or in foreign currency, to ensure equity and prevent tax avoidance.

Mining Taxation

• Current Regime: The existing mining fiscal regime is characterized by high royalty rates (5% + 2% excise) and additional national and local taxes, which are not conducive to growth.
• Issues Identified:
  • Net Mineral Revenue (NMR) calculation excludes capital charges, which may lead to under-taxation.
  • The "additional government share" is not progressive and fails to capture resource rents effectively.
  • Lack of "ring-fencing" provisions may lead to revenue leakage if the regime is profit-based.
• Recommended Reforms:
  • Introduce an ad valorem tax on metals based on market value, with a progressive mechanism to capture resource rents.
  • Apply specific royalty rates based on volume for non-metal minerals like construction stones.
  • Implement front-end loading of revenues to secure government income as soon as production starts.
  • A specific tax policy mission on mining is recommended to evaluate different fiscal regimes and their revenue impacts.

Key Information

• Tax Revenue Target: Increase tax revenue by 3.0% of GDP by 2016.
• Tax Reform Progress:
  • The 2010 FAD mission recommended rationalizing incentives, indexing excises, and broadening the VAT base.
  • The DOF has prepared bills for rationalizing tax incentives and excises, but they are still pending in Congress.
• Revenue Impact Estimates (in % of GDP):
  • Tax Incentives Reform: Unquantifiable increase in all years.
  • Excises (Tobacco): 0.33% in 2012, increasing to 0.51% in 2016.
  • Excises (Liquor): 0.34% in 2012, increasing to 1.04% in 2016.
  • Petroleum: 0.42% in 2016.
  • Mobile Communications: 0.67% in 2016.
  • VAT Refund Mechanism: Estimated to increase revenue by 0.26% of GDP in 2016.
  • Total Revenue Impact: 3.0% of GDP in 2016.
• World Bank Recommendations:
  • The mission found some differences with the World Bank, particularly on the top PIT rate and withholding tax on interest.
  • The World Bank recommended a 25% top PIT rate, while the mission suggests maintaining it at 32% for now due to income inequity.
  • The mission supports a unified 20% withholding tax rate on interest, aligning with current domestic rates.

Conclusion

The mission provides a detailed road map for tax reform, emphasizing the need for rationalization of incentives, indexing of excises, and broadening the VAT base. It also highlights the importance of improving tax administration, enhancing compliance, and ensuring equity in the tax system. The recommendations aim to increase tax revenue, improve competitiveness, and align the Philippines’ tax system with international standards.