The automotive automobile excise, will industry will not weaken completely offset the because several factors additional expenses from other than excise taxes _ the increase in affect its performance. automobile excise. This The personal income tax assures that the sales of reduction, which is part automobiles, now on of the same package as higher prices, will not the proposed slow down. S @ www.dof.gov.ph/taxreform [FJ@DOFPH [J@DOF_PH #TaxReformNowMore importantly, the Therefore, increase in Philippine automotive car prices from the industry is riding ona automobile excise will period of solid and not necessarily translate stable economic growth. _ to loss of jobs. Incomes of people have been rising, and firms have been growing so they have more leeway to take in additional expenses. S @ www.dofgov.ph/taxreform [F|@DOFPH [J@DOF_PH #TaxReformNowOur proposed tax reform program will improve the lives of the people, especially the poor. It promotes equity such that those who have higher income will shoulder more burden compared to those with lower income. Through our proposal, Filipinos will contribute based on their capacity to pay. S @ www.dof.gov.ph/taxreform F]@DOFPH [J@DOF_PH #TaxReformNowNo, it is not anti-poor. In | There are 262,496 (61%) fact, SUVs running on diesel in 2015 compared to 78,288 (51%) a decade . In 2016, ago. This is giving a lot the registered number of of tax breaks to the rich. vehicles for public USE iS Data from Land Transportation Franchising and 321,729* while the PUB, minibus, PU, tax, UV exprece, ane number of private cars **Data from the Land Transportation Office (LTO) registered that are using diesel is 1,802,673**. @ www.dofgov.ph/taxreform [F|@DOFPH [J@DOF_PH #TaxReformNowCommuters also consume diesel through the fare they pay for jeepney rides, but at a lesser degree. For every P8 that they pay, only around 30% or P2.40 is the share of oil in the fare. This will lead to a 24-cent increase in fare price which will be addressed through several mitigating measures like the jeepney modernization program and a cash assistance for the poor. S @ www.dofgov.ph/taxreform [F|@DOFPH [J@DOF_PH #TaxReformNowThis caused the government to lose significant revenue that could have gone to Consumers are _ social services, better still paying the same public transportation, amount of excise tax as —_ and climate they did two (2) decades _ change-resilient ago even if average infrastructure. income has more than doubled. S @ www.dof.gov.ph/taxreform F]@DOFPH [J@DOF_PH #TaxReformNowThe increase in excise tax also hopes to reduce the consumption of petroleum products in order to prevent the harm caused by air pollution and traffic congestion. S @ www.dof.gov.ph/taxreform F]@DOFPH [J@DOF_PH #TaxReformNowby lowering the PIT, reducing VAT exemptions, and adjusting excise tax rates on petroleum products and automobiles. S @ www.dofgov.ph/taxreform [F|@DOFPH [J@DOF_PH #TaxReformNowie a All these will stimulate the economy more and benefit the poor. This is a , such as by more inclusive way of constructing school spending our shared buildings, roads, and resources, rather than bridges and funding merely boosting basic social services, and individual consumption social protection. spending by lowering all taxes. @ @ www.dofgov.ph/taxreform [F|@DOFPH [J@DOF_PH #TaxReformNowie a Every P100 spent by the government on social services, such as health and education, will have if we want to a multiplier effect of 1.9% create a more equitable and 1.2%, respectively to society where everyone the economy; while feels the change. spending P100 on infrastructure will yield a higher return of more than 2.0%. @ @ www.dofgov.ph/taxreform [F|@DOFPH [J@DOF_PH #TaxReformNowA number of factors support increasing oil excise today: First, , with growth of 7%, the fastest in the region. Second, at around 1.8% in 2016. Third, in the medium-term due to i) slow China growth from 14% to 6%, and ii) large shale oil supply to keep supply going. Moreover, this is a popular government with strong political will to do important reforms. S @ www.dof.gov.ph/taxreform F]@DOFPH [J@DOF_PH #TaxReformNowIt’s true that there is something wrong with our Personal Income Tax (PIT). Restructuring the PIT alone will not correct the tax system’s inequity. There are structural weaknesses that need to be corrected, namely: Several taxes that have not been adjusted in 20 years; Excessive exemptions and special treatments granted without good basis; and Highly restrictive bank secrecy laws. Our goal is to correct our tax system’s inequity and make it progressive. S @ www.dof.gov.ph/taxreform F]@DOFPH [J@DOF_PH #TaxReformNowNo, prices of basic Our estimate shows that goods and public food prices may increase transportation will not by additional 1% in the skyrocket. In fact, first year of inflation will be implementation while additional 1.5% at transport price may the most. increase by additional 2%. S @ www.dofgov.ph/taxreform [F|@DOFPH [J@DOF_PH #TaxReformNowEffective VAT rate Dubai crude (in USD) GDP growth Overall Inflation Food inflation Transport inflation Electricity inflation Gasoline (in PHP) Diesel (in PHP) on inflation: Na S @ www.dofgov.ph/taxreform [F|@DOFPH [J@DOF_PH #TaxReformNow le eseeBut we are not taking chances. If the Dubai crude oil price exceeds 100 USD per barrel, we will stop increasing excise tax to provide relief to everyone. S @ www.dofgov.ph/taxreform [F|@DOFPH [J@DOF_PH #TaxReformNowTo ensure compliance, tax administration measures are included in the proposal: (in lieu of the income — Relax bank secrecy laws for tax and percentage tax) fraud cases for small businesses, Use of electronic receipts self-employed, and Connect cash registers/point professionals. of sale machines to BIR servers for simultaneous reporting of sales and purchase data @ www.dof.gov.ph/taxreform F]@DOFPH [J@DOF_PH #TaxReformNowIt simplifies the system Value Added Tax (VAT) and makes it fairer and exemptions, and more equitable by adjusting the excise tax restructuring the rates on petroleum Personal Income Tax, products and removing unnecessary automobiles. @ @ www.dof.gov.ph/taxreform F]@DOFPH [J@DOF_PH #TaxReformNowIn our proposal, 83% of Implemented together individual taxpayers with proposed social including minimum wage _ protection mechanisms, earners (P250K and the overall impact below) will be exempted benefits the poor and from paying income tax. — the vulnerable sectors. S @ www.dofgov.ph/taxreform [F|@DOFPH [J@DOF_PH #TaxReformNowUnderspending is a short-term problem being resolved through budget reform in concerned agencies. The present administration is addressing this. For 2017, reforms are in place to ensure proper spending and utilization of budget. S @ www.dofgov.ph/taxreform [F|@DOFPH [J@DOF_PH #TaxReformNowHowever, addressing underspending alone will not be enough to support the vision of this administration for all Filipinos. Although the overall goal of the tax reform is to address the inequity of the current tax system, it will also help achieve this administration’s vision through additional investments in social services, health, education and infrastructure. S @ www.dofgov.ph/taxreform [F|@DOFPH [J@DOF_PH #TaxReformNow