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Investment incentives and effective tax rates in the Philippines: a comparison with neighboring countries
- Source :
- Journal of the Asia Pacific Economy. 15:166-191
- Publication Year :
- 2010
- Publisher :
- Informa UK Limited, 2010.
-
Abstract
- We compare the general tax provisions and investment incentives in the Philippines to six other east-Asian economies-Malaysia, Indonesia, Lao, Vietnam, Cambodia, and Thailand. We calculate effective tax rates and find that general effective tax rates are relatively high in the Philippines, while investment incentives are comparable to those in neighboring countries. Tax holidays are most attractive for very profitable firms, creating redundancy, and for investment in short-lived assets. We also consider recently-proposed tax reforms that would replace tax holidays by a reduced corporate income tax rate or a low tax on gross receipts. The results suggest that this would result in stronger incentives to invest, while government revenue increases. Alternatively, replacing holidays with a general reduction in the corporate tax rate and offering accelerated depreciation will either not provide the same incentives or be very costly.
- Subjects :
- Finance
business.industry
Direct tax
Geography, Planning and Development
Monetary economics
Development
Tax reform
Tax avoidance
Tax rate
Personal income
Incentive
Value-added tax
Ad valorem tax
Tax credit
Accelerated depreciation
Income tax
Political Science and International Relations
Government revenue
Economics
General Earth and Planetary Sciences
Corporate taxes
Investment incentives
Southeast Asia
Revenue sources
Philippines
Tax reforms
Effective tax rates, South-East Asia, Tax holidays, tax rates, tax incentives, tax rate, taxation
business
Corporate tax
Indirect tax
General Environmental Science
Subjects
Details
- ISSN :
- 14699648 and 13547860
- Volume :
- 15
- Database :
- OpenAIRE
- Journal :
- Journal of the Asia Pacific Economy
- Accession number :
- edsair.doi.dedup.....3c87c248384f77f6a29de78fa4562fcd