Philippines: Tax reform to improve Phl fiscal stability: Fitch – 8 Jun 2017

  • International credit rating agency Fitch Ratings said the passage of the first package of the tax reform program shows the commitment of the Duterte administration to improve the country’s fiscal stability and support its ambitious public investment program.
  • Fitch said the tax package passed by the House of Representatives last week would widen the tax base and boost revenue. The debt watcher pointed out tax reform is crucial to the rest of the administration’s 10-point socioeconomic agenda that includes plans to ramp up investment in infrastructure, health, education and social protection.
  • The Duterte administration vowed to raise infrastructure spending to 7.4% of gross domestic product by 2020 while keeping its budget deficit ceiling at 3% of GDP.
  • Estimates made by the Department of Finance (DOF) showed the full set of tax reform packages would boost revenue by 2% of GDP by 2019 while administrative measures that simplify tax bureaucracy would add another 1% of GDP to revenues.
  • Early this week, Moody’s Investors Service said the passage of the first package of the comprehensive tax reform program (CTRP) would help the Philippines raise much needed revenues to finance infrastructure projects.

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