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This can be sustainably achieved through tax reform, which is integral to the
larger goals of the administration and crucial for achieving the vision of a
prosperous country.
In addition, complementary economic reforms are crucial: secure property
rights, enhance competition, improve food security, and simplify regulations.
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Gas 46 53 55 56 56.40
Gains from the lower PIT regime are more than enough
to offset additional expenses from higher oil prices, car
loan payments, and inflation.
Combined effect Package 1 change in annual take home pay (in pesos)
A comparison
RVAT 2005 and oil price shock 2011:
We survived and became much stronger.
VAT reform Oil price shock
Indicator 2004 2005 2006 2010 2011 2012
Effective VAT rate 0 10 12 12 12 12
Dubai crude (US dollars) 34 49 61 78 106 109
GDP growth 6.7 4.8 5.2 7.6 3.7 6.7
Consumption 6.0 4.4 4.2 3.4 5.6 6.6
Overall Inflation 4.8 6.5 5.5 3.8 4.6 3.2
Food inflation 6.0 6.4 5.2 4.0 5.5 2.4
Transport inflation 11.5 16.8 10.7 3.7 6.0 2.3
Electricity inflation 3.8 7.5 5.9 5.1 5.2 4.6
Gasoline (in pesos) 20.1 26.5 30.0 35.5 48.1 48.6
Diesel (in pesos) 18.0 25.9 30.2 31.4 41.3 41.7
1
30
0.8
20 0.6
0.4
10
0.2
0 0
Unleaded pump price (LHS) Diesel pump price (LHS) New car registrations (RHS)
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