Impact on the Economy

High end revenue impact in 2018 (PHP billion and percent of GDP)

Tax Package Loss Gain Net
Pagkage 1: PIT and consumption -139.6 302.1 162.5
Lower personal income tax rate -137.9
Estate and donor tax -1.7
VAT base expansion 92.5
Automobile excise 31.4
Excise tax on petroleum 120.9
Complementary revnues 57.4
Tax Package Loss Gain Net
Pagkage 1: PIT and consumption -0.8 1.7 0.9
Lower personal income tax rate -0.8
Estate and donor tax 0.0
VAT base expansion 0.5
Automobile excise 0.2
Excise tax on petroleum 0.7
Complementary revnues 0.3

Gains from the lower PIT regime are more than enough
to offset additional expenses from higher oil prices, car
loan payments, and inflation.

impact-on-economy

Price effect of excise on inflation 2017 to 2018

\

Commodity Share of CPI (%) CPI 2015 Net impact of excise to price (%)2.3/td>

Net impact of excise to price (%)2.3 Inflation rate (%)4.5
Food 36 159 10 1.9 1.2 1.1 1.4 1.6
Transportation 6 129 30 5.7 3.5 3.4 4.2 4.8
Electricity 7 131 7 1.3 0.8 0.8 1.0 1.1
Other 51 131 7 1.2 0.7 0.7 0.9 1.0
Total 100 141 1.5


A comparison

RVAT 2005 and oil price shock 2011:

We survived and became much stronger.


VAT Reform Oil Price shock
Indicator 2004 2005 2006 2010 2011 2012
Effective VAT Rate 0 10 12 12 12 12
Dubai crude (USD) 34 49 61 78 106 109
GDP (%) 6.7 4.8 5.2 7.6 3.7 6.7
Consumption (%) 6.0 4.4 4.2 3.4 5.6 6.6
Overall Inflation (%) 4.8 6.5 5.5 3.8 4.6 3.2
Food Inflation (%) 6.0 6.4 5.2 4.0 5.5 2.4
Transport Inflation (%) 11.5 16.8 10.7 3.7 6.0 2.3
Gasoline (PHP) 20.1 26.5 30.0 35.5 48.1 48.6
Diesel (PHP) 18.0 25.9 30.2 31.4 41.3 41.7