IMF all for Duterte’s corporate tax reform

The International Monetary Fund (IMF) regional director has expressed support for the Duterte administration’s planned corporate tax changes, which aim to improve the country’s business environment.

In his statement, IMF Asia and Pacific Department Director Changyong Rhee said that the second package of the Philippine tax reform is a “major step forward” that would modernize corporate taxes in the country.

“It will help build a more equitable, efficient, and transparent corporate tax system with a lower corporate income tax rate for everyone and a clearer focus on the country’s development priorities,” added Rhee.

House Bill 7458 is designed to provide gradual and conditional cuts in the corporate income tax rate from 30 percent to 20 percent. It also proposes the modernization of investment incentives by ensuring that only qualified industries are given fiscal perks.

According to an earlier BMI research, investments could slow down amid “uncertainties” over the government’s proposed conditional reduction in corporate tax and repeal of fiscal incentives, adding that such measure will likely make the Philippines less competitive among other countries in the region.

Rhee, however, said that an early approval of the second tax reform package will help the Philippines with its performance in the global economy. He explained that it will show the country’s determination to modernize its institutions and give confidence in the Philippines’ commitment to keep its public debt manageable as it increases spending on infrastructure programs.

via Philippine Star / Ian Nicolas Cigaral