Phl least attractive

University of the Philippines (UP) Professor Benjamin Diokno has submitted a study that the Philippines will be the least attractive investment destination in Association of Southeast Asian Nations (ASEAN) once it formally integrates as an emerging bloc in 2015.

Diokno pointed out that the Philippines does not have a good governance record and does not have a favorable tax regime. The Philippines is lagging behind its Asean neighbors in infrastructure. For this reason, the Philippines will be the least preferred investment destination.

Diokno pointed out too that among ASEAN-5 economies, the Philippines has the biggest corporate tax rate at 30 percent as compared to Singapore’s 17 percent and Thailand’s 20 percent. He also stated that the conflict between the high corporate income tax (CIT) rate and the low tax effort can be attributed to rampant smuggling; the proliferation of redundant fiscal incentives which has been estimated, conservatively, at one percent of gross domestic product (GDP); and poor tax administration.

Several lawmakers have proposed lowering the corporate income tax rate to 25 percent. Also still pending are bills to rationalize fiscal incentives. Tax administration must be further improved to at least 15 percent of GDP. After four years, that appears to be difficult to achieve.

BIR Commissioner Kim Jacinto Henares is a permanent fixture in our annual top 10 performances of government officials. She has increased tax collections every year and has a towering reputation for being immune to compromise. There has only been one criticism — that is of not applying the law equally to subjects of the same class.

A 3rd Malampaya contractor has been slapped with tax evasion charges. What about the hundreds of contractors of other high profile government projects? Are Solenn Heusaff and Judy Ann Santos really the only A-List media personalities who have not filed the correct returns? A Luxury car dealer has been assessed with back taxes but Mercedes Benz, BMW, Lexus, Rolls Royce, Jaguar, Ferrari, among others, have not been touched. –Ernesto M. Maceda (The Philippine Star)