the philippine national budget: part 2
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Taxation,Debt and Borrowings: Worldbank and IMF, Implementation of the National Budget, Procurement processTRANSCRIPT
7/21/2019 The Philippine National Budget: Part 2
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Taxation: The Lifeblood of the Nation
Taxation is the inherent power of the sovereign,
exercised through the legislature, to impose burdens
upon subjects and objects within its jurisdiction for
the purpose of raising revenues to carry out the
legitimate objects of government
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Purposes of Taxation
! Revenue or fiscal: The primary purpose of
taxation on the part of the government is to provide
funds or property with which to promote the general
welfare and the protection of its citi"ens and to
enable it to finance its multifarious activities
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Purposes of Taxation
# Non-revenue or regulatory: Taxation may also be employed for purposes of regulation or control
a$ %mposition of tariffs on imported goods toprotect local industries
b$ The adoption of progressively higher tax rates to
reduce ine&ualities in wealth and incomec$ The increase or decrease of taxes to preventinflation or ward off depression
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'ules and regulations on tax collections are specified
in the Tax 'eform (ct of !))* %t identifies whose
duty it is to pay taxes in the country:
( citizen of the Philiines resi!ing therein is taxable
on all income derived from sources within and without the
Philippines+
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( nonresi!ent citizen is taxable only on income derived
from sources within the Philippines+
(n in!ivi!ual citizen of the Philiines "ho is "or#ing
an! !eriving inco$e fro$ a%roa! as an overseas
contract "or#er is taxable only on income derived from
sources within the Philippines+
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(n alien in!ivi!ual& "hether a resi!ent or not of the
Philiines, is taxable only on income derived from sources
within the Philippines+
( !o$estic cororation is taxable on all income derived
from sources within and without the Philippines+ and
( foreign cororation, whether engaged or not in trade or
business in the Philippines, is taxable only on income derived
from sources within the Philippines
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ebt and Borrowing: -orld Ban. / %01
2uperficially the Ban. and %01 exhibit manycommon characteristics
Both are in a sense owned and directed by thegovernments of member nations
Both institutions concern themselves with economicissues and concentrate their efforts on broadening
and strengthening the economies of their membernations
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The fundamental difference is this: the Ban. isprimarily a development institution+ the %01 is acooperative institution that see.s to maintain anorderly system of payments and receipts betweennations
3ach has a ! different purpose, # distinct structure,
4 receives its funding from different sources, 5assists different categories of members, and 6 strivesto achieve distinct goals through methods peculiar toitself
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The current issues on public debts and economic
crisis maybe be traced bac. between the years !)*)7
!)89, these were the times when the government
revenues declined by !6 percent of P
while expenditures increased by 46 percent
(s a result, by !)89, the government faced theprimary deficit of !9 percent and the fiscal deficit
increased for over 6 percent of P
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Thereafter, Philippine governments have reacted to
revenue shortfalls and by the beginning in !))8, the
tax7to7P ratio began to decline The government
deficit continued to rise until #;;#
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(nd in #;;47#;;5, the government did try to cut its
primary spending by !# percent of P 1urther, in
#;;), the fiscal deficit was 4) percent ofthe P
2ince then, because of budget deficits, the country
continued to obtain debts and implemented
expenditure cuts
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%mproving 'evenue performance is one majorchallenge for the Philippine government
Last (ugust #;!5 report, an estimated P#6; billion islost yearly because of tax evasions
This would simply mean that the government must
necessarily exhaust all the efforts to raise taxcompliance, and it must also curb corruptionpractices in the revenue agencies
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%n #;!4, the overnment achieved a budget deficite&uivalent to !5 percent of P
(nd last 0arch #;!5, the epartment of 1inancesaid that Budget deficit is expected to hit the amount
of P45#Billion which is more or less #4 percent ofthe P
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The rising debt service payments have affected and
lessen the country<s public expenditures for the priority
areas7 such as basic education, health and transport
Between !))* and #;!;, the shares of the national
budget going to the epartment of 3ducation, the
epartment of =ealth >?=$ and to capital outlaysdeclined from !8 to!5 percent, from 4 to # percent and
from #; to !; percent respectively
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ebt and Borrowing: -orld Ban. / %01
“Because of our fiscal consolidation efforts, we will need
to borrow only P674.8 billion to finance the projected
P308.7billion deficit, to a!orti"e P347.7 billion of our
!aturin# outstandin# debt, while !aintainin# sufficient
a$ailable cash. %his will enable us to further reduce our
debt stoc& to 4'.8 percent of ()P by end*0'6.+
-Presi!ent 'enigno S( A)uino III
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%mplementation of National Budget
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