WB: tax reforms key to attract more investments

Wikipedia Photo

MANILA — The World Bank noted in its East Asia and Pacific Economic Update report that the country’s investment gap could be filled by better tax administration and policy reforms.

Tax administration improvement rather than new taxes, may generate about 3.8 percent of gross domestic product in fiscal space for the medium term.

This may eventually make up for the investment gap, according to the World Bank report.

It added that another percentage may come from tax policy reforms to generate a more equitable, efficient and simpler tax system.

The World Bank specifically noted that incentives, for instance, need to be more targeted, transparent, performance-based and temporary.

“The Philippines needs to accelerate reforms that can translate to higher growth into even more inclusive growth – the type that creates more and better jobs – and improve the impact of social sector spending,” the WB said.

In a forecast, it also sees the country’s economy to expand to 6.5 percent this year after the government’s budget that emphasizes on infrastructure, spending, and initiating key policy reforms is fully implemented.