MANILA, Philippines – The National Government (NG) expects to lose P51 billion to P56 billion this year because of the implementation of various tax measures, estimates by the interagency Development Budget Coordination Committee (DBCC) showed.
Of the P51 billion to P56 billion, the government expects to lose P15 billion to P20 billion from the implementation of the law, reducing the minimum corporate income tax rate to 30 percent this year from 35 percent previously.
The Reformed Value Added Tax (RVAT) Law, passed in 2005, increased the minimum corporate income tax to 35 percent from 30 percent but this has been reduced again to 30 percent this year.
The law also raised the sales tax to 12 percent from 10 percent and lifted exemptions on oil and petroleum products.
DBCC data also showed that the government expects to lose P26 billion this year due to the implementation of Republic Act 9504. The law, which started in July last year, exempted minimum wage earners from tax payments and increased the personal exemptions of regular income earners.
The government also expects to lose P7 billion from the implementation of the law creating a retirement account for individuals or the Personal Equity Retirement Account (PERA) measure.
President Arroyo has already approved the PERA measure but the DOF has yet to draft the implementing rules.
Under the PERA measure, an individual contributor may make a total maximum annual contribution of P100,000 or P200,000 for both spouses.
Contributions are required to be invested in a qualified PERA investment product.
The contribution shall be given an income tax credit equivalent to five percent of the total PERA contribution. Income from the contribution as well as the eventual distribution of the PERA to the contributor shall also be tax exempt.
Meanwhile, the government expects to lose from P3 to P6 billion from the implementation of the Tourism Act of 2009.
The measure, expected to be signed by Mrs. Arroyo today, provides tax incentives to tourism-related enterprises.
On top of these estimates, the government said it could also lose P60 billion in potential revenue because of easing inflation, (P31 billion); lower oil prices, (P26 billion); and lower interest rates, (P3 billion).