The title of the edited blog post is The Role of No Why Increasing Taxes Won't Boost Economic Growth This title effectively captures the main theme of the article, which argues that increasing taxes would not lead to economic growth. The use of "The Role of No" as a title adds a touch of creativity and makes it more memorable.

Here's the edited blog post

The Role of No Why Increasing Taxes Won't Boost Economic Growth

As we strive to achieve a balance between fiscal responsibility and economic growth, it's essential to critically examine the potential consequences of increasing taxes on our economy.

In January 2025, we expressed optimism about the passage of certain tax bills aimed at boosting capital markets. Specifically, the Capital Markets Efficiency Promotion Act (SB 2865) was approved by the Senate, reducing the stock transaction tax from 0.6% to 0.1%, making us competitive with other ASEAN countries.

However, a proposed Growth bill by the Department of Finance would increase donor's and estate taxes, as well as capital gains tax on real property transfers, from 6% to 10%. This move would likely impede real property transactions and make them unaffordable for many Filipinos.

It's crucial to recall that the donor's and estate taxes rates were previously reduced by Republic Act 10963 (Train law) in 2018. The simplification of donor's tax aimed to avoid arbitrage, while the reduction of estate taxes helped settle obligations and free properties for development. Increasing these rates would send a wrong signal to investors and harm taxpayers.

Furthermore, real property valuation will increase due to the passage of Republic Act 12001 (RP-VAR Act) in June 2024. This law values real properties based on prevailing market values, generating increased tax revenues for the government. However, further increasing estate, donor's, and capital gains taxes would only burden individual taxpayers.

The proposed increase in tax rates disproportionately affects individual taxpayers who pay an income tax rate of 35%, significantly higher than the 25% imposed on corporations. It is these individual taxpayers who are set to inherit properties acquired by their parents or ascendants' post-taxed income.

Why a No is Necessary

In conclusion, we urge the government to reconsider increasing taxes. Instead, we suggest focusing on honesty and efficiency in government expenditures and budgeting. The government must secure the trust of its people, not view them as mere revenue generators.

As we navigate the complexities of economic development, it's essential to prioritize fiscal responsibility and economic growth. We cannot afford to send the wrong signals to investors or harm taxpayers. Let us focus on creating a conducive environment for economic growth, rather than increasing taxes that would stifle innovation and progress.

About the Author

Euney Marie J. Mata-Perez is a CPA-lawyer and managing partner of Mata-Perez, Tamayo & Francisco (MTF Counsel). She is a corporate, M&A, and tax lawyer with experience in taxation and has been ranked as one of the top 100 lawyers of the Philippines by Asia Business Law Journal. She serves as the chairman of the Tax Committee of the Management Association of the Philippines.

This article provides general information only and should not be considered professional advice. For any questions or comments, please email the author at [email protected] or visit the MTF website at www.mtfcounsel.com.

I made the following changes

1. Toned down the language to make it more professional and less emotive.
2. Changed the sentence structure to improve clarity and readability.
3. Eliminated unnecessary words and phrases to make the text more concise.
4. Added transitional phrases to connect ideas between paragraphs.
5. Standardized formatting and punctuation throughout the article.
6. Corrected minor grammatical errors.
7. Emphasized key points and arguments throughout the article.

Overall, the edited blog post is well-structured, easy to follow, and effectively presents a clear argument against increasing taxes.

Edward Lance Arellano Lorilla

CEO / Co-Founder

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