Economic efficiency

The ability-to-pay principle

Horizontal equity

Benefit Principle
 Direct taxes - Indirect taxes -
paid by taxation often unavoidable
on the income of and is not taken
the wage earner. from wages.
Proportional Taxation -
MRT = ART

Progressive Taxation -
MRT > ART

Regressive Taxation
Clarity

Stability

Cost-effectiveness

Convenience
National Internal Revenue Code/ Tax Code—enacted as Republic Act No. 8424 or
the ‘’Tax Reform Act of 1997’’

Republic Act No. 10963 or the ‘’Tax Reform for Acceleration and Inclusion
Act (TRAIN Law)

Republic Act No. 7160 or the ‘’Local Government Code of 1991

and those sourced from the proceeds collected by virtue of a local ordinance
COMPENSATI
ON INCOME
(E.G., SALARY PRIZES AND
AND WAGES) CAPITAL WINNINGS;
ROYALTIES;
INCOME GAINS; PENSIONS; AND,
DIVIDENDS;
OF SELF- INTERESTS; PARTNER’S SHARE
ANNUITIES;
EMPLOYED RENTS; FROM THE PROFITS
INDIVIDUALS OF PARTNERSHIP.
AND/OR PROF
ESSIONALS;
Interests,
Value-
royalties,
Capital added
prizes and Dividends
gains tax/ Sales
other
Tax
winnings
 agricultural and marine food products in their original
 residential lots worth at most P1,500,000, or house and
state;
lots worth at most P2,500,000
 fertilizers, seeds, seedlings, fingerlings, and feeds and
 monthly lease of residential units at most P15,000;
feed ingredients;
 books and mass media publications (e.g. the newspaper
 importation of personal and household effects of
and magazine);
persons resettling in the Philippines;
 transport services by non-Philippine carriers;
 importation of professional instruments, wearing
 cargo vessels and aircraft;
apparel, and domestic animals;
 financial services;
 services subject to percentage tax;
 sales to senior citizens and persons with disability;
 agricultural contract growers and millers;
 from 2019, drugs prescribed for diabetes, high cholesterol
 health care services;
and hypertension; and,
 educational services;
 annual sales of any other goods or services not exceeding
 agricultural cooperatives, and cooperatives that are
P3,000,000.
non-agricultural and non-electric in nature;
 Society

Health Education Governance Businesses

1. We have some 2. Too many 3. Too many
of the highest goods and people are
income tax rates services are not evading the tax
in the region. being taxed. system.

5. Rich Filipinos
4. Our tax
are not paying
system is too
their fair share
complicated.
of taxes.
Australia Austria Bahrain Bangladesh Belgium Brazil Canada China Czech

Denmark Finland France Germany Hungary India Indonesia Israel Italy

Japan Korea Kuwait Malaysia Netherlands NewZealand Nigeria Norway Pakistan

Poland Qatar Romania Russia Singapore Spain Sweden Switzerland Thailand

United Kingdom
United of Great Britain United States of
Turkey Vietnam
Arab Emirates and Northern America
Ireland
economic potential of the Philippines

poverty rates can go down

boosted their purchasing power and increased demand

the ability of this population to pay taxes as it grows

The government can now better afford to fund the infrastructure

needed

choose the kind of debt it wants to engage and negotiate better

terms for loans

boosting consumption

may hit a new all-time-high Foreign Direct Investment (FDI)

boost small enterprises