The Corporate Income Tax: Its Distributive Implications on Individual Shareholders

Nilda Vasquez
Additional contact information
Nilda Vasquez: School of Economics, University of the Philippines Diliman

No 198102, UP School of Economics Discussion Papers from University of the Philippines School of Economics

Abstract: Under the present system of income taxation in the Philippines, there is a differential burden created by the corporate income tax on shareholders' incomes vis-a-vis other types of personal income. Corollarily, within the corporate sector, a built-in incentive exists in favor of debt finance, but the role of this factor in the corporate choice between equity and debt finance has not been empirically established. Another major equity issue is the regressivity of the differential burden of the corporate tax among shareholders. This extra burden may eventually turn into a tax shelter for high-income taxpayers, creating a strong inducement for tax avoidance by capitalizing on the corporate device through retention of corporate profits. The proposed 20 percent final tax on dividends, which is part of the gross income package proposed under Cabinet Bill No. 34, is a tax in rem and will intensify the existing regressivity.

Date: 1981-02
References: Add references at CitEc
Citations:

Published as UPSE Discussion Paper No. 1981-02, February 1981

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:phs:dpaper:198102

Access Statistics for this paper

More papers in UP School of Economics Discussion Papers from University of the Philippines School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by RT Campos ().