Asia Minute: Tax Reform in the Philippines

Dec 15, 2017

Metro Manila
Credit Wikimedia Commons

For weeks now, Congress has been working on changes to the U.S. tax code. But it’s not only the United States that is pushing tax reform. It was also a campaign pledge on the other side of the Pacific. HPR’s Bill Dorman has more in today’s Asia Minute.

Donald Trump was not the only presidential candidate to include tax reform as part of a recent election platform.

Philippine President Rodrigo Duterte talked a lot more about punishing drug users and suppliers when he was on the campaign trail, but he did mention tax reform.

This week the Senate and the House of Representatives agreed on a package that will cut Philippine income taxes, but increase taxes on other areas—including consumer goods from cars to tobacco and commodities from fuel to coal.

Taxes are also going up on drinks using sugar and artificial sweeteners, and increasing twice as much on drinks with high fructose corn syrup.

Cosmetic surgery will have an extra tax, and taxes on mining will be doubled.

There are some twists: automobile taxes will be higher on more expensive models, but electric cars are tax-exempt. And so are pick-up trucks.

Critics say the tax changes will hurt the poor, especially the increased taxes on fuel.

But the Duterte administration has a comfortable majority in both houses of the Philippine congress, so legislative approval was not difficult.

The president says he wants to increase infrastructure projects as his top spending priority.

Other areas for more modest spending increases include education and health and a project called the “Sugarcane Industry Development Act.”