Investment Incentives and Effective Tax Rates in the Philippines; A Comparison With Neighboring Countries
We compare the general tax provisions and investment incentives in the Philippines to six other east-Asian economies-Malaysia, Indonesia, Lao, Vietnam, Cambodia, and Thailand. We calculate effective tax rates and find that general effective tax rates are relatively high in the Philippines, while investment incentives are comparable to those in neighboring countries. Tax holidays are most attractive for very profitable firms, creating redundancy, and for investment in short-lived assets. We also consider recently-proposed tax reforms that would replace tax holidays by a reduced corporate income tax rate or a low tax on gross receipts. The results suggest that this would result in stronger incentives to invest, while government revenue increases. Alternatively, replacing holidays with a general reduction in the corporate tax rate and offering accelerated depreciation will either not provide the same incentives or be very costly.
|Date of creation:||01 Sep 2008|
|Contact details of provider:|| Postal: International Monetary Fund, Washington, DC USA|
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
|Order Information:||Web: http://www.imf.org/external/pubs/pubs/ord_info.htm|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Doyle, Christopher & van Wijnbergen, Sweder, 1984.
"Taxation of Foreign Multinationals: A Sequential Bargaining Approach to Tax Holidays,"
CEPR Discussion Papers
25, C.E.P.R. Discussion Papers.
- Chris Doyle & Sweder Wijnbergen, 1994. "Taxation of foreign multinationals: A sequential bargaining approach to tax holidays," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 1(3), pages 211-225, October.
- Aldaba, Rafaelita M., 2006.
"FDI Investment Incentive System and FDI Inflows: The Philippine Experience,"
DP 2006-20, Philippine Institute for Development Studies.
- Aldaba, Rafaelita M., 2008. "FDI Investment Incentive System and FDI Inflows: the Philippine Experience," Research Paper Series RPS 2007-03, Philippine Institute for Development Studies.
- Rafaelita M. Aldaba, 2006. "FDI Investment Incentive System and FDI Inflows : The Philippine Experience," Finance Working Papers 22335, East Asian Bureau of Economic Research.
- Alexander D Klemm, 2008. "Effective Average Tax Rates for Permanent Investment," IMF Working Papers 08/56, .
- Shang-Jin Wei, 1997.
"How Taxing is Corruption on International Investors?,"
William Davidson Institute Working Papers Series
63, William Davidson Institute at the University of Michigan.
- Shang-Jin Wei, 2000. "How Taxing is Corruption on International Investors?," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 1-11, February.
- Shang-Jin Wei, 1997. "How Taxing is Corruption on International Investors?," NBER Working Papers 6030, National Bureau of Economic Research, Inc.
- Renato E. Reside Jr., 2006. "Towards Rational Fiscal Incentives (Good Investments or Wasted Gifts?)," UP School of Economics Discussion Papers 200601, University of the Philippines School of Economics.
- Gordon, Roger H. & Hines, James Jr, 2002.
Handbook of Public Economics,
in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 28, pages 1935-1995
- Nigel A Chalk, 2001. "Tax Incentives in The Philippines; A Regional Perspective," IMF Working Papers 01/181, .
- Devereux, Michael P & Griffith, Rachel, 2003.
"Evaluating Tax Policy for Location Decisions,"
International Tax and Public Finance,
Springer;International Institute of Public Finance, vol. 10(2), pages 107-126, March.
- Bernstein, Jeffrey & Shah, Anwar, 1993. "Corporate tax structure and production," Policy Research Working Paper Series 1196, The World Bank.
- Antonio Estache & Vitor Gaspar, 1995. "Why Tax Incentives Don't Promote Investment in Brazil," ULB Institutional Repository 2013/44076, ULB -- Universite Libre de Bruxelles.
- Mintz, Jack M, 1990. "Corporate Tax Holidays and Investment," World Bank Economic Review, World Bank Group, vol. 4(1), pages 81-102, January.
When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:08/207. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow)or (Hassan Zaidi)
If references are entirely missing, you can add them using this form.