Tax Incentives Database Build-up and Analysis (TIDBA) for Tax Expenditure Estimation and Policy Analyses Purposes

Sector: Governance and Public Finance

Country: Philippines

PRIMEX fielded four specialists to conduct this study. The Team Leader/Tax Consultant/Technical Writer performed the following tasks: (i) compilation of an inventory of administrative and legislative laws that create or potentially create TI/Es; (ii) Identification of benchmarks and assessment of the impact of deviations from benchmarks; (iii) ensuring that complete information from the inventory of laws and issuances on TI/Es are lodged in the database such that the database is validated and useful for possible simulations and policy analysis; (iv) compilation of detailed data on taxpayers availing of TIs, by firm, sector, and type of tax; (v) development of tax calculators and logics required to estimate incentives availed and possible revenue impacts; (vi) utilization of existing, or development of new, methodologies for estimating TI/Es; (vii) ensuring continuous improvement in the quality of data used to estimate TI/Es by obtaining the appropriate statistics required to facilitate TI/Es; (viii) obtaining data from sources other than taxpayers’ returns, import entries, and TE reports that will enable or facilitate TE estimation or verification; (ix) defining the TE benchmark for all TI/Es and being aware of other TI/E benchmarks from other comparative countries; (x) identification of ways to enhance transparency of TI/Es and always ensuring TI/E accuracy; and (xi) coming up with studies and analyses of the micro data sources identified in the project and development of TI/E models for fiscal purposes, making use of, but not limited to, the available TI/E data specific to the project. The Fiscal/Tax Modeler ensured the accuracy of the model by providing a logical database and validation process. The Database Developer: (i) built a database drawing from the existing TI/E information/data from the BIR tax returns and BOC import entries, which were provided to DOF by the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), TIMTA Law annexes, and other data sources identified useful for the project, in accordance with data requirements dictated by the TI/E experts, who performed the policy analysis needed for the project; (ii) integrated the database developed into a single TIMTA data warehouse system, which is accessible for developing policy analyses; and (iii) building a database or warehouse for the inventory of administrative and legislative laws on TI/Es. The Business Intelligence Tool Modeler electronically translated the econometric or fiscal models that the Tax Consultant and the Fiscal Modeler developed and linked different databases developed for policy analysis purposes and report generation. The Econometrician/Statistician supported the statistics and econometric programs required by the Tax Consultant for the statistical analysis of TI and TE data.