Public Sector Fiscal Policy

Philippine Government

•Its power is equally divided among its three branches: Executive, Legislative and Judicial; It promotes the BEST INTERESTS of its citizens.

PUBLIC SECTOR

The part of the economy controlled by the government, including national and local governments and government-owned corporations.

Public Goods

are non –rivalrous and free and financed by TAX REVENUES

Private Goods

must be purchased to be consumed, its owners exercise property rights and rivalrous.

Fiscal Policy

It aims to organize efficient ways to implement government functions

Fiscal Policy

It primarily focus on government spending where it discusses the increase and decrease in government spending to the aggregate demand

Restrictive

Reduction of aggregate demand

Expansitory

Increase of aggregate demand.

National Budget

It is the government’s plan for the use of government revenues.

National Budget

It shows the government priorities to enrich the condition of life of the citizens.

Deficit Spending

When government expenditures exceed revenue, leading to borrowing.

TAX LAWS SHOULD BE WRITTEN CLEARLY

Tax policies must be understood by both tax payers and tax collectors.

Easy to collect

Tax is easy to collect.

YIELD ENOUGH REVENUE

Tax collection should be administered at the lowest possible cost

FAIR & JUST

Taxes should be imposed impartially and justly.

Benefit Principle

Taxes are paid in proportion to the amount of services or benefits we receive.

Ability-to-pay Principle

Taxes are paid according to the income we earn.

Equal Distribution Principle

An example of this is Value Added Tax(VAT) where goods and services are both consumed by the rich and the poor

Proportional Tax

A tax where all taxpayers pay the same percentage of their income.

Progressive Tax

means tax rate progresses from low to high.

Regressive Tax

means tax rate decreases as the amount subject to taxation increases.

Direct Tax

is levied on the income of the person who pays it.

Indirect Tax

is imposed on the value of products and services, later shouldered by the end user

INCOME TAX

levied on citizens and companies that have earned income.

EXCISE TAX

tax on produced and sold products.

VALUE-ADDED TAX

imposed on products and services consumed by a person.

COMMUNITY TAX

is an annual residence tax depends on income (by age 18 years with regular employment).

TARIFF

an import duty tax on imported products.

REGULATORY TAX

imposed on both buy and use of products to control the price.

PROFESSIONAL TAX

levied on specific occupations that are lawfully pursued.

PROPERTY TAX

tax on persons with real property.

(VAT) Value-Added Tax

took effect on January 1, 1988 through Executive Order No. 273 signed by the President Corazon Aquino. VAT levied on businesses that earn minimum amount of 2,000 pesos daily or 5,000 yearly.

(E-VAT) The Expanded Value Added Tax

On May 5, 1994, President Ramos signed Republic Act 7716. All consumers have to pay 10 percent for all the products that the tax covers.

(R-VAT) Reformed Value Added Tax

President Gloria Macapagal-Arroyo signed Republic Act No. 9337, Almost all products and services are subjected to 12 percent.

(TRAIN) Tax Reform for Acceleration and Inclusion Act

Republic Act No. 10963, is the initial package of the Comprehensive Tax Reform Program (CTRP) signed into law by President Rodrigo Duterte on December 19,2017.

Government-Owned or Controlled Corporations (GOCCs)

State-owned enterprises that operate in various sectors, including finance, utilities, and public services.

INCOME FROM SALE OF CAPITAL OWNED BY THE GOVERNMENT

profit from sale of corporations that provide funds

GRANTS-IN –AID

•include aid from other countries INCOME FROM THE PHILIPPINE AMUSEMENT AND GAMING

INCOME FROM THE PHILIPPINE AMUSEMENT AND GAMING CORPORATION

profit from casinos operated by PAGCOR.