The Effectiveness of Tax Incentives

778 Words2 Pages

This research will determine the effectiveness of putting incentives on tax policies in the level of tax collection of Baguio city. Its efficiency will be evaluated through the use of cost-benefit analysis, which will weigh the level of costs and benefits for the possibility of a profit for the community. As the increase in tax revenues reveal the activeness in political and economic activities of the people, it also serves as a driver in development and growth. While most of the city’s revenues come from business establishments, economic enterprises and real property according to the city Treasurer, it is intriguing how the city manages to reach their target tax collection and continue to increase their registered business permits. Incentives can be in the form of individual or corporate tax incentives, which can include deductions, benefits, etc., which will likely influence the trend of tax collection in a period of time.
Instruments that contribute in economic growth and development have been one of the agendas for nations around the world; its uses become more evident in solving the situation of developing countries after the colonization period. Exercising the sovereignty of the state through collection of taxes has been one of the major sources of physical funds to achieve the state’s quest for growth and development to generate better welfare for their people. Ahmad and Stein (1991) would say that issues regarding the principles of the theory of taxation on how efficient would the government finance its activities is still questionable. But the question that needs to be asked first is how the state would earn maximum revenues to have funds allocated properly in government expenditures. Theory on optimal taxation would su...

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...lopment-oriented goal of the community.
Incentives given should not result to loss in revenues; otherwise it will not make a perfect sense. The problem regarding the complicated tax system in our country may be analyze and change considering that according to the 1987 constitution, “The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of taxation. (Article VI, Section 28, Paragraph 1). The system should consider every possible situation and factors for a more collective way of taxation; this will be reflected on the concepts of good governance and division of labors in the bureaucracy.

Works Cited

http://business.inquirer.net/10205/expert-says-philippine-tax-system-a-%E2%80%98complicated-mess%E2%80%99
http://documents.worldbank.org/curated/en/2013/06/17886462/promoting-growth-caribbean-tax-incentives-theory-practice

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