Tax Incentives in The Philippines: A Regional Perspective

IMF Working Papers, November 1, 2001

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Tax Incentives in The Philippines: A Regional Perspective

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Bibliographic details

• Authors: Nigel A Chalk
• Published: November 1, 2001
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451859195.001

Overview

• The Philippines faces a policy dilemma in corporate taxation: a decline in revenue as a share of output alongside increasing regional competition for foreign direct investment.
• To remain competitive, the Philippines offers a broad array of fiscal incentives to entice inward investment and pursue development goals.
• The paper examines fiscal incentives available in the Philippines, compares them with those available in the ASEAN region, and with evidence on the efficacy of tax incentives in a global context.
• The paper provides broad conclusions on the use of various forms of tax incentives in the Philippines and on their administration.

Key Findings and Themes

• Decline in revenue as a share of output is identified as a central fiscal concern.
• Competitive pressures in the regional market for foreign direct investment motivate the use of fiscal incentives.
• The Philippines' incentive framework is multidimensional, including instruments such as tax allowances, tax holidays, accelerated depreciation, duty drawback, and special economic zone (SEZ) enterprise regimes.
• The analysis situates Philippine incentives in an ASEAN and global evidence context to assess efficacy.

Comparison with ASEAN and Global Evidence

• The paper compares Philippine fiscal incentives with those available across the ASEAN region.
• It relates country practices to global empirical evidence on the efficacy of tax incentives for attracting investment and influencing location decisions.
• The framework considers categories such as import duty treatment, double taxation issues, and incentives targeted at footloose companies versus location-specific investments.

Conclusions on Use and Administration

• The paper offers broad conclusions on:
  • The appropriate use of various forms of tax incentives in the Philippines.
  • Administrative considerations in implementing and managing fiscal incentives.
• Policy-relevant topics covered include corporate income tax design, investment incentives, tax holidays, and tax allowances.

Subjects and Keywords

• Subjects: Corporate income tax, Investment incentives, National accounts, Tax allowances, Tax holidays, Tax incentives, Taxes
• Keywords: accelerated depreciation; companies expense; Corporate income tax; corporate tax incentives. ASEAN.; double taxation; duty drawback; economic zone; footloose company; Global; import duty; investment decision; investment incentive; Investment incentives; location decision; personal income; SEZ enterprise; Tax allowances; Tax holidays; Tax incentives; WP

Content in this bundle

• Tax Incentives inThe Philippines: A Regional Perspective - WP/01/181
  • Tax Incentives inThe Philippines: A Regional Perspective - WP/01/181 (Markdown version)
  • Tax Incentives inThe Philippines: A Regional Perspective - WP/01/181 (PDF)