fiscal lesson 3

• Development Planning


  The preparation of the Development Plan and other supporting policies, information or studies which form the basis for making decisions on planning applications
• Development Plan


  An instrument used to define a country's future direction or destination
• Development Planning as a process

  1. Helps the formulation of effective development policies through systematic management of resources for the purpose of achieving definite targets or objectives within a specific period of time

  2. Involves deliberate effort of the government to influence the major socio-economic variables like GDP, consumption, savings, investment, prices and employment, etc., of a country for a specific period of time to achieve its desired objectives
• Types of Development Plan according to Time Duration

  • Perspective or long-term plan (15-20 years period)
  • Medium term plan (3-7 years period)
  • Annual plan (1 year period)
• Philippine Development Plan (PDP)


  The government's overall guide in development planning for six years, reflecting the government's socio-economic policies, strategies, and programs in support of and consistent with the development agenda of the President and geared towards the attainment of development goals and objectives in the long-term development plan
• Importance of Development Planning according to NEDA

  • It enables the government to come up with a shared vision of where the country should be in the future and a concerted program of action to achieve this vision
  • It ensures that government resources and investments are channeled to programs, projects, and activities that best achieve the country's goals and objectives
• PDP in Different Administrations

  • Philippine Economic Development a Technical Memorandum 1947-1952 (Roxas Administration)
  • The Cuaderno Plan: Five-Year Program of Rehabilitation & Industrial Development, 1949-1953 (Quirino Administration)
  • The Five-Year Economic Development Program for F.Y. 1955-1959 (Magsaysay Administration)
  • Five-Year Economic & Social Development Program F.Y. 1957-1961 (Garcia Administration)
  • Three-Year Program for Economic & Social Development, F.Y. 1959 & F.Y. 1951-52 (Macapagal Administration)
  • Five-Year Philippine Development Plan, 1978-1982 (Ferdinand Marcos Administration)
  • Medium-Term Philippine Development Plan, 1987-1992 (Corazon Aquino Administration)
  • Medium-Term Philippine Development Plan, 1993-1998 (Ramos Administration)
  • Medium-Term Philippine Development Plan 1999-2004 (Estrada Administration)
  • The Medium-Term Philippine Development Plan 2001-2004 (Arroyo Administration)
  • Philippine Development Plan 2011-2016 (Benigno Aquino Administration)
  • Philippine Development Plan 2017-2022 (Duterte Administration)
  • Philippine Development Plan 2023-2028 (Ferdinand Marcos Jr. Administration)
• AmBisyon 2040


  The Government of the Philippines' 25-year long term vision to end poverty in the country by 2040, where the Philippines will be a prosperous, predominantly middle-class society where no one is poor
• Pillars of AmBisyon 2040

  • MATATAG (Stable)
  • MAGINHAWA (Comfortable)
  • PANATAG NA BUHAY (Secure Life)
• Core Ambitions of PDP 2040

  By 2040, the Philippines will be a prosperous, predominantly middle-class society where no one is poor, our people will live long and healthy lives, be smart and innovative, and will live in a high-trust society
• Revenues


  All cash inflows into the national government treasury that are collected to support government expenditures but do not increase the national government's liability
• Tax


  A legally mandated contribution levied by the government for a public purpose
• Tax revenue


  Revenue collected from income and profit taxes, social security contributions, taxes on goods and services, payroll taxes, taxes on property ownership and transfer, and other taxes
• Major classes of tax revenues

  • Income and profit taxes
  • Property taxes
  • Domestic goods and services taxes
  • International trade and transaction taxes
  • Other sources
• Income and profit taxes

  Levied on all taxable income earned or received by a taxpayer, whether as an individual, a partnership, or a corporation, during a specific time period, which is usually one year
• Domestic goods and services taxes

  Taxes on the use or sale of locally manufactured goods and local services provided within the domestic territory
• Taxes on international trade and transactions


  Import and customs duties, as well as other government collections on international trade and transactions
• Property taxes


  Levied on the ownership of wealth or immovable property at regular intervals, as well as on the transfer of real or personal property
• Other taxes


  Primarily include motor vehicle tax, immigration tax, and forest charges
• Comprehensive Tax Reform Program (CTRP)

  The new tax measure launched by the Duterte administration and the Department of Finance (DOF) to broaden the tax base and simplify the tax structure in order to reduce leakages, undeclared revenues, overstated deductions, and corruption, thereby making the system more elastic and easier to administer
• Four Major Tax Reform Packages in the Philippines

  • TRAIN Act (Package 1)
  • Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act (Package 2)
  • Real Property Valuation Reform (Package 3)
  • Passive Income and Financial Intermediary Taxation Act (PIFITA)
• Non-Tax Revenue


  Recurring income earned by the government from sources other than taxes, such as fees collected from services provided by government agencies to the public and from the government's regulatory and investment activities
• Services of Government to the Public

  • Power Supply/Electricity
  • Telecommunication
  • Fees for communication services
  • Broadcasting Fees
  • Roads, Bridges usage fees
  • Fee for Administrative Services
  • Municipal Services
• Importance of Non-Tax Revenue

  It is a source of government income to support government expenditures and helps recover the cost of services offered
• Taxation as a Power


  An inherent power of the State exercised by the lawmaking body to enforce contributions from its subject over persons, properties, privileges within its jurisdiction to defray the necessary expenses of the government for public purpose
• Three Inherent Powers of the State

  • Police Power
  • Power of Eminent Domain
  • Power of Taxation
• Taxation is a legislative function, not an executive function, although the Executive Branch is given the role of collecting taxes</b>
• Taxation is a law-making function, not a collecting function, since the collecting part is merely the result of legislation
• Subject of Taxation


  Persons, Properties, and Privileges within the jurisdiction of the State
• Judicial Branch


  The branch of the government that interprets the law
• Interpretation


  If there is an ambiguity in the law created by the legislature, the Judicial Branch will resolve how it should be interpreted through Supreme Court decisions
• Judicial review


  If there is grave abuse of discretion amounting to lack or excess of jurisdiction, it is the job of the Supreme Court to declare that act by the other branches of the government to be unlawful or unconstitutional
• Power of taxation


  A legislative function, not an executive function
• Taxpayers


  • Resident citizens
  • Non-residents
  • Resident aliens
  • Non-resident aliens
  • Domestic corporations
  • Resident foreign corporations
  • Non-resident foreign corporations
• Types of taxes


  • Tax on persons (personal taxes, poll taxes, community tax)
  • Tax on properties (property taxes, real property taxes)
  • Tax on privileges (excise taxes, income tax, value-added tax)
• Taxation as a power has its limits, and one of those is it is territorial
• Lifeblood theory


  Taxes are the lifeblood of the government, without which the government cannot exist nor endure
• The Wealth of Nations was written in the 17th and 18th centuries, when the United States of America tried to become independent of its Colonial Master, Great Britain
• Expenses of the state or government

  • Defense
  • Justice
  • Public Works and Public Institutions
  • Commerce
  • Education of the Youth
  • Instruction for all ages
  • Sovereign's dignity
• Expenses to promote


  • Public Health
  • Public Order
  • Public Morality
  • Public Education
  • Salus Populi Suprema Lex Esto