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A $500 million Philippine tax deal may be hard to resist

A $500 million Philippine tax deal may be hard to resist

MANILA: A $500 million tax settlement offer by a tobacco maker may be difficult for the Philippine government to refuse as it struggles to raise funds.

Caesar Dulay, head of the tax agency responsible for 80% of revenue, said he is keen on accepting a 25 billion-peso (16.7 billion baht) compromise offer from Mighty Corp. to settle three complaints for alleged unpaid taxes worth 38 billion pesos. While it is the Finance Department which will decide on the offer, that amount is too hard to resist, he said in an interview on Thursday.

Revenue rose 8.9% in the first half of the year, missing a goal of a 12% increase, the tax commissioner said, citing preliminary data that’s not been made public. The tax agency is tasked to raise 1.83 trillion pesos (1.22 trillion baht) this year, an increase of about 16%.

President Rodrigo Duterte, who took office a year ago, needs more revenue to finance an ambitious $180 billion infrastructure plan and a deadly war against drugs that’s killed thousands. The government is also pushing for higher taxes on oil and cars as it aims to cap the budget deficit at 3% of gross domestic product.