Duterte wants tax reform, 'Davao model' for economy
Joel Guinto, ABS-CBN News
Tax reform and the "Davao model" are part of Duterte's eight-point economic agenda that also includes the following:
- maintaining current macro-economic policies;
- keeping infrastructure spending at 5% of gross domestic product (GDP);
- easing ownership restrictions for foreign investors;
- increased support for agriculture and tourism development;
- strengthening the basic education system; and,
- expanding the conditional cash transfer program.
Share prices rallied for two days after Duterte won Monday's vote by a big margin. However, stocks closed 0.97 percent lower on Thursday as investors waited for more clarity on his plans for one of Asia's fastest-growing economies.
Dominguez said the eight programs unveiled in Davao City were "broad outlines."
He said Duterte would adjust income tax brackets to the current inflation rate. With a "progressive" system, "the tax bite should be lower" for some, he said.
"These tax tables were made many years ago when P500,000 meant more than what P500,000 means now," Dominguez said.
Davao's reputation for relatively crime-free streets and ease of doing business helped make it a bustling metropolis in the conflict-wracked south, Duterte said during the campaign.
"We will follow the Davao City model. In other words, where licenses for doing business are given in the shortest possible time, where government is actually helping business to establish in Davao," Dominguez said.
"It also means reducing crime... It will increase the security of businessmen as well as the consumers," he said.
In an interview with ABS-CBN News, Duterte's economic adviser, Ernesto Pernia, said Duterte was planning to lower income tax rates to 25 percent from 32 percent, which is among the highest in Southeast Asia.
"We need to be aligned with the tax system of our ASEAN neighbors. We need to be competitive. If investors see the tax system here is too punishing, they're not going to invest here," he said.
Duterte also suggested raising the cap of foreign ownership in business to 70 percent from 40 percent, he said.
"Eventually it may be even relaxed some more, eased some more," he said. -- with a report from Michelle Ong, ABS-CBN News