HIGH TAXES A MAJOR DETERRENT IN INVESTING IN RP -- NCC
MANILA, FEBRUARY 23, 2008 (STAR) By Ma. Elisa P. Osorio - Local and foreign businessmen have identified high taxes as one of the biggest deterrents in investing in the country.
The National Competitive Council (NCC), in cooperation with several business groups, will submit to the government 10 most problematic items for businessmen in the country.
NCC private sector chairman Cesar Bautista named five of the most challenging areas. He said the rest will be identified at a later date.
“The fees charged by LGUs (local government units) are increasing rapidly and are becoming uncompetitive,” Bautista said.
In order to address this concern, the government is offering tax perks to some businesses particularly those operating in economic zones.
However, the fiscal incentives being given by the government are in question before the Congress as some lawmakers are considering removing the income tax holidays.
Business tax in the Philippines is one of the highest among ASEAN member nations, a joint report by the World Bank and PricewaterhouseCoopers said.
According to the report, the total tax rate for businesses in the Philippines is 52.8 percent. This means that for every P100 earned, a tax of P52.80 must be paid to the government. Out of the 178 nations polled, the Philippines’ total tax rank was 135.
Of all the ASEAN nations polled, the closest to the 135 ranking of the Philippines is Vietnam which was number 82 with a total tax rate of 41.1 percent.
Thailand, Indonesia and Brunei were lumped together with a tax rate of 37.7 percent, 37.3 percent and 37.4 percent, respectively. Malaysia’s total tax rate was 36 percent; Lao, 35.5 percent; Singapore, 23.2 percent; and Cambodia, 22.6 percent.
The survey includes mandatory contributions borne by business in their second year of operation.
Second, Bautista said businessmen are concerned with the length of time needed to process documents necessary for their business.
Also, Bautista said they would like to see changes in land and business registration.
Chief News Editor: Sol Jose Vanzi
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