Philippines passes major tax reform law
Philippines passes major tax reform law
Economists and environmentalists have praised the package, with the Philippines winning a credit rating upgrade this week from Fitch Ratings and green campaigners hailing the higher tax on coal.
Officials said the tax reforms, the most significant revenue-boosting measure introduced since Duterte took office last year, would finance increased spending on infrastructure to ease the cost of doing business.
“The tax reform (act) seeks to achieve a simpler, fairer, and more efficient tax system characterized by lower rates and a broader base, to encourage investment, job creation, and poverty reduction,” Finance Secretary Carlos Dominguez said in a statement.
The government has warned that bad roads, crowded trains and poor Internet speed have hindered the country’s competitiveness and threaten to derail efforts to lift millions out of poverty.
The key provisions of the bill, which Duterte is expected to sign later this month, includes a rise in the excise tax on coal, the fuel that runs almost half the country’s power plants.
The coal tax will increase incrementally to ten-fold or 100 pesos (SR7.44) a ton by 2020 according to the version passed in Congress late Wednesday.
The act also significantly raised excise taxes on automobiles, petroleum products including diesel, gasoline and cooking gas, and jacked up mining levies.
The effort to raise revenues also led to a “sweetened beverage tax,” an excise tax on “cosmetic procedures, surgeries and body enhancements,” and the doubling of tax rates on dollar deposits, capital gains tax and stock transactions.
The affected sectors have warned of an inflation spike but Congress has described the legislation as pro-poor for lowering income tax rates and exempting some small businesses from paying a sales levy.
Duterte has vowed to launch a “golden age of infrastructure,” with spending of about $170 billion for roads, railways and airports during his six-year term.
International credit rating agency Fitch had earlier cited the impending passage of the tax reforms as one of the reasons behind its decision to upgrade the Philippines’ credit rating on Monday.
“We estimate the bill to be net revenue positive, reflecting an expansion of the VAT (value-added tax) base and higher taxes on petroleum products, automobiles and on sugar sweetened beverages, which would more than offset a lowering of personal income taxes,” Fitch said in a statement.
Congress this week also passed a 3.767-trillion-peso national budget for 2018, a 12.4-percent increase from last year.
Aramco committed to meeting future oil demand, says Saudi energy minister
- Aramco has discovered two new oil fields, Sakab and Zumul, and a gas reservoir in the Sahba field
- World’s top oil exporter is also boosting its output of the natural gas needed to meet rapidly rising domestic power demand
DUBAI: Saudi state oil giant Saudi Aramco remains committed to meeting future oil demand through continued investments, the kingdom’s Energy Minister Khalid Al Falih said in a company report on Friday.
Aramco, which is slated for a public share sale, “continued to prepare itself for the listing of its shares, a landmark event the company and its board anticipate with excitement,” Al Falih, who is also chairman of Saudi Aramco, said.
Despite an improved market picture, the oil industry’s preparedness for the future remained in question as the sector had lost an estimate $1 trillion in planned investments since the start of the market downturn, Al Falih wrote.
“Significant new investments are required in additional capacity and expended and upgraded infrastructure, as well as the development of pioneering technology to make petroleum energy more sustainable and accessible,” he said.
The company discovered two new oil fields, Sakab and Zumul, and a gas reservoir in the Sahba field, Aramco said in the report.
Aramco said “it will maintain its position as the world’s leading crude oil producer by production volume by tempering production from mature fields, accelerating younger fields and secondary reservoirs, and developing fresh reserves from new increments.”
The world’s top oil exporter is boosting its output of the natural gas needed to meet rapidly rising domestic power demand and supply raw materials to its strategically important petrochemical industry.
In gas, Aramco “commenced projects to expand production and processing capacity, and brought online the first unconventional gas in Saudi Arabia,” Aramco’s Chief Executive Amin Nasser said in the report.
Aramco was preparing the Midyan non-associated gas field last year to produce 75 million standard cubic feet per day (scfd) of non-associated gas and 4,500 barrels of condensate per day, it said in the report.
Midyan is one of the new gas fields in northwest Saudi Arabia to produce gas for power plants and potentially supply other industries in a region rich in iron ore deposits. It was discovered in the 1980s and has significant reserves.