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Tax Reform: A Make-or-Break Policy

By: Ser Percival K. Pena-Reyes, MA and Justin Jerome G. Valle
“Build, Build, Build” is a new development mantra signifying the largest infrastructure push in Philippine history to propel economic growth in the next five to six years. Among the key investments that the Philippine government will make are big-ticket infrastructure projects, specifically roads and bridges, mass urban-transport systems and alternative green city solutions. These are envisioned to solve the problems attributed to traffic congestion, inadequate mass-transport facilities, air pollution and lack of green, healthy community spaces.
Nevertheless, in a world of scarce resources, there is no such thing as a free lunch, which simply means that there is a cost to bear for every benefit one enjoys. “Build, Build, Build” is no exception to this rule, so the importance of tax reform comes to the fore, as it will largely contribute to the funding of these infrastructure plans. This column attempts to provide a condensed explanation of tax reform for everyone’s benefit.
For starters, one must consider the government, which, like any other productive unit in society, needs to raise revenues in order to spend. Government spending typically encompasses operating expenses, basic services provision, infrastructure investment and other items. Revenues, in turn, are raised from various sources, notably taxes from firms and individuals.
Read the full article at http://www.businessmirror.com.ph/tax-reform-a-make-or-break-policy/