Assessing the Potential Impacts of Reducing Philippine Corporate Income Tax and Reforming Sectoral Incentives on Poverty and Employment

Authors

Caesar Cororaton, Virginia Polytechnic Institute and State University
Marites Tiongco, De La Salle University, Manila

Document Type

Policy Brief

Publication Date

9-2020

Place of Publication

DLSU-Angelo King Institute, Room 223, LS building, 2401 Taft Avenue, Manila 0922

Abstract

The Philippines needs to re-align its corporate income tax rates to its neighboring ASEAN countries to be competitive. Thus, the reduction in the corporate income tax rate, which is 30% at present to 20% in 2029 under the tax reform, is critical. However, because corporate income tax is a major source of government revenue, corporate incentives have to be reduced as well to finance/compensate for the reduction in the corporate tax. Also, to realize the full economic benefit of the reform, the government has to ensure that the resulting higher corporate income is reinvested back to the economy.

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Recommended Citation

Cororaton, C., & Tiongco, M. (2020). Assessing the Potential Impacts of Reducing Philippine Corporate Income Tax and Reforming Sectoral Incentives on Poverty and Employment. Retrieved from https://animorepository.dlsu.edu.ph/res_aki/116

Disciplines

Taxation | Tax Law

Keywords

Corporate Income Tax Reform; Sectoral Incentives; Computable General Equilibrium Model; Poverty Simulation; Philippines

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