Businessmen ask government to restructure tax system

MANILA, Philippines - Local businessmen are asking the government to restructure the tax system by limiting the allowable deductions in order to simplify the collection and ultimately collect more taxes.

Speaking with reporters on the sidelines of the 8th Management Association of the Philippines (MAP) International CEO conference, MAP president Eusebio V. Tan said that they are proposing a gross revenue taxation. “We want to simplify taxation and minimize computations,” Tan told reporters. “No more negotiating.”

For instance, Tan said that if the gross revenue of the person is P100 and the tax is five percent, the five percent will be deducted immediately. This will ignore the other deductions that people and companies usually enjoy.

Tan said that a simpler tax collection scheme would make it easier for the government to monitor and collect taxes. Likewise, he said that a new tax scheme would force the government to review the existing tax brackets.

Currently, the tax system is based on the net earnings of companies. The proposed scheme will cover both individuals and companies.

Meanwhile, Tan said that despite of the recent controversies that have been surrounding the Aquino administration, businessmen are still optimistic. “If he (President Aquino) needs a little bit more time then so be it. We are still generally hopeful that things will improve,” Tan said.

Tan said that they will be meeting with the President on Friday. During this time, he said that MAP will present their own wish list for the new administration.

Foremost on their wishlist, Tan said is the Ninoy Aquino Terminal Three (NAIA 3). “This is a festering thing that needs to be addressed because it doesn’t send the right message to investors.” Tan said that MAP is even willing to help fund the money needed in order to operate the airport properly.

With regards to the infrastructure, Tan said MAP members are ready to participate in the Public Private Partnership (PPP). The government is in the process of putting together a list of infrastructure projects than can be funded by the private sector.

Likewise, Tan said that they are supportive of the decision of the government to review the operations of government owned and controlled companies (GOCCs). “The government is doing an audit and they are reviewing things that need to be changed.”

On the issue of investments, Tan said that he is in favor of fiscal rationalization. He said that if there is enough infrastructure there is no need to give a lot of incentives because businessmen would invest as long as there is infrastructure in place.

He said that although businessmen consider sweeteners like incentives in their decision to invest, infrastructure like airports, bridges and roads are enough incentives to attract more investments.