Less than a week before the 2025 Philippine midterm elections, the air crackles with promises, rhetoric, and the tug-of-war for the hearts and minds of voters. But, beyond the focus on personal appeal and platforms to get votes through touching promises of a better future for the Filipinos and through caucus here and there, a crucial battleground is continually emerging: taxation. Tax policies, far from being a purely economic concern, are poised to define the upcoming elections and the nation's economic future.
The Philippines, like many developing nations, wrestles with a complex fiscal and taxation reality, grey areas in tax laws and so much bureaucracy. The lingering economic scars of the pandemic, coupled with inflation and persistent social inequalities, have brought tax policies into sharp focus. Voters are, as they should be, no longer content with vague promises; they demand concrete plans on how candidates intend to fund their ambitious ideas and agendas, more than how these will be implemented, while wishing for lessened taxes and, if not possible, the halted further raising of taxes already imposed, and ensuring a more equitable and transparent distribution of the nation's wealth.
A Fiscal Legacy: The Rumble of TRAIN, the Promise of CREATE and the Aid of EOPT
The outgoing administration leaves behind a complex fiscal legacy. The Tax Reform for Acceleration and Inclusion (TRAIN) Law, which was praised but also has been a spark for criticism, particularly regarding its impact on consumer prices because of its lowered individual income tax rates, increased tax-exempt income and optional and simplified 8% flat tax in lieu of graduated income tax and percentage tax, resulting in a higher disposable income. Conversely, its excise taxes on fuel and sweetened beverages gained mixed responses and eroded the purchasing power of ordinary Filipinos.
The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, designed to attract investments and stimulate economic recovery, is also facing scrutiny for its potential long-term impact on government revenue. While the law seeks to streamline and rationalise the various fiscal incentives previously granted under different laws, the reduction in corporate income tax rates it introduced, which is intended to boost competitiveness, raises concerns about the government's ability to fund future essential social services.
The Ease of Paying Taxes (EOPT) Act, which was anticipated by the majority of taxpayers for its removal of the ₱500 annual registration fee, the “file and pay anywhere” mechanism, and uniform tax base and documentation (i.e., VAT invoice) for all types of transactions, is continuously receiving comments on other items that were excluded from the reliefs, such as its failure to clarify the timing of claiming of creditable withholding tax (CWT) in contrast to its detailed provisions on VAT refund claims.
These three landmark legislations will undoubtedly cast a long shadow over the 2025 elections, forcing candidates to articulate their positions on their continuation, amendment, or repeal. The electorate will demand answers on how these policies have impacted their lives and will look forward to what alternatives are being proposed.
The Hot-Button Quests: Fueling the Electoral Fire
Several tax-related issues are poised to ignite the electoral fire, driving the debate and shaping the candidates' platforms:
The Voter's Command: Accountability, Equity and Clarity
In this high-stakes electoral arena, voters hold the power to shape the nation's fiscal future. They must demand accountability, equity and clarity from the candidates vying for their votes.
Conclusion: The Victory in Long-Term Fiscal Imperative Beyond the Ballot Box
The 2025 elections are not just about choosing leaders and lawmakers; they are about shaping the nation's fiscal trajectory for years to come. The choices made at the ballot box will determine the government's ability to fund essential social services, invest in infrastructure, and address the pressing challenges facing our country.
Voters must engage in informed discussions, scrutinise candidates' tax proposals, and demand a commitment to fiscal responsibility and social equity. By making informed choices, and not just by voting based on popularity or one-sided debate, we can ensure that the 2025 elections become a turning point in the nation's journey towards a more prosperous and equitable future.
The taxman cometh like he always does, and the voters must be prepared to hold him accountable and to not let the game be over.
Let’s Talk Tax, a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.
As published in BusinessWorld, dated 06 May 2025
