Discussions centered on fiscal and tax policy concerns, including tax predictability, consistency in implementation, and ease of doing business. Key issues raised covered fuel taxation, audit consistency, and accountability of revenue officers. DOF officials provided updates on escalation mechanisms, ongoing reforms, and accountability measures. The dialogue concluded with proposed actions to enhance taxpayer support and strengthen public–private collaboration to sustain the Philippines’ regional competitiveness.
GPCCI President Ms. Marie Antoinette Mariano opened the session by underscoring that for long-standing German partners, reflecting a 71-year diplomatic relationship, investment decisions are shaped more by clear policy direction and consistent implementation than by tax rates alone. Citing the latest AHK World Business Outlook Survey, she noted growing concern within the German–Philippine business community over the interpretation and enforcement of existing regulations. “Investors do not just look at what is written in the law; they look at how the system practices it,” Ms. Mariano emphasized, warning that uncertainty often redirects capital to more predictable jurisdictions.
Representing the GPCCI Tax and Finance Working Group Sector Lead, Atty. Benedicta Du-Baladad, Atty. Irwin Nidea Jr. presented five high-priority issues vital to maintaining the Philippines’ competitiveness amid aggressive regional peers such as Vietnam, Indonesia, Thailand, and Malaysia.
Central to his presentation was the call for a shift toward end-to-end digitalization moving beyond “digitally assisted paperwork,” where processes begin online but conclude manually to fully integrated digital systems for tax rulings, audit submissions, refunds, and tax clearances. To further strengthen investor confidence, Atty. Nidea Jr. stressed the importance of early dispute resolution through mediation and settlement frameworks, noting that prolonged audits can outlast entire investment cycles or even the lifespan of the businesses involved.
He further underscored the need to streamline tax rulings, noting that delays in securing these critical interpretations often result in investments being redirected to other jurisdictions. The Working Group also called for greater clarity in the treatment of cross-border transactions, particularly in addressing uncertainties arising from BIR Revenue Memorandum Circular No. 5-2024, and for the alignment of digital services taxation with international norms to ensure administrative simplicity and promote, rather than discourage, digital investment.
Undersecretary Karlo Fermin Adriano delivered the agency briefing, outlining the government’s fiscal strategy centered on prudent management and a growth target of at least 5 percent for 2026. He cited the Philippines’ fiscal resilience, highlighted by a general government debt-to-GDP ratio of 53.88 percent and the country’s recent exit from the Financial Action Task Force (FATF) Grey List. Key legislative developments were also discussed, including the CREATE MORE Act—providing up to 40 years of fiscal incentives—and the Public-Private Partnership (PPP) Code, which currently supports 209 flagship infrastructure projects. The Bureau of Internal Revenue (BIR) likewise presented new digital initiatives, such as the Registered Business Enterprise Taxpayer Service (RBETS), chatbot-enabled Letter of Authority (LOA) verification tools, and interactive digital tax calendars designed to reduce discretionary processes.
During the tour de table discussion, GPCCI members raised sector-specific concerns, including the proposed suspension of fuel excise taxes and the imposition of VAT on digital services. Solar energy developers flagged operational delays linked to National Telecommunications Commission (NTC) clearance requirements for imported equipment. In response, the DOF committed to facilitating inter-agency coordination and requested affected companies to submit detailed documentation to support direct engagement with the NTC. The department also announced the shift to a computerized, risk-based audit selection system beginning in 2025 to enhance transparency and fairness.
Mr. Mathias Kruse, Deputy Head of Mission of the German Embassy, summarized the exchange by describing the dialogue as a “hands-on” and productive forum crucial to building investor confidence. He encouraged the continuation of such engagements, noting that the DOF’s openness to private sector feedback reflects meaningful progress. The meeting concluded with a renewed commitment from both sides to advance a digital and sound fiscal governance agenda in support of sustainable and inclusive growth for both countries.
