SOUTH EAST ASIA 18
PHILIPPINES
Tax reforms may have sting in the tail Philippine President Rodrigo Duterte late last year signed into law the first steps in a long-awaited tax reform program to raise funds to improve infrastructure, which analysts say will dampen consumer spending, but are unlikely to hurt the booming gambling industry.
H
owever, a second round of measures may contain more of a sting and operators are watching the bill closely. Any policies that could affect spending power in the Philippines are significant, as the country has a strong mass market, dominated by local visitors. Known as the Tax Reform for Acceleration and Inclusion (TRAIN) law, the program reinvents the country’s 20-year tax regime. The government claims it will be a simpler and fairer system, designed to shift the tax burden
Asia Gaming Briefings | March 2018
from the lower 99 percent of the community to the wealthiest 1 percent. This is being rolled out in a series of packages across the year. The first package sees a reduction in personal income tax rates benefiting taxpayers earning above minimum wage and an increase in excise levies on items such as petroleum and automobiles, tobacco and sugar-sweetened beverages among others. These will be staggered and adjusted gradually in a bid to generate P130 billion ($2.53 billion) in additional revenues. With the new income tax rates, the winners
are Filipinos making an annual taxable income of P250,000 (around $5000) and below as they will no longer need to pay income tax from 2018 onwards. Meanwhile, those earning above P8 million ($156,000) annually will be slapped with 35 percent personal income tax, higher than the current 30 percent. Small businesses are likewise expected to benefit from the TRAIN law, which offers an optional flat 8 percent tax based on gross sales or receipts in lieu of business and income taxes. But not everyone is happy. According to Rosario Bella Guzman, research head
