Implication on the Collections of Taxes from Individuals and

Corporations Income Tax on Businesses

RATIONALE:
Philippines is one of the countries that is in a state of high-risk of the newly
coronavirus outbreak, originated from Wuhan China. It was confirmed that a 38-year old
female who arrived from Wuhan was positive from the coronavirus, the first case virus
patient in the Philippines. This country is found to be a living home from hundreds of
Chinese workers and Manila is the Top 30 cities that is commonly receiving China airline
passenger, the majority tourist population in the country and adapted culture relationship
with the locals.
Preventive measures were applied since the start of the outbreak by the
government and several steps have been taken to stop or minimize the spread from the
infection such as travel restrictions, minimize public exposure, educate the schools or
closure of some universities in a selected area, and many more.

The government announced such travel restrictions to and from China, Hong
Kong, and Macau to minimize the spread. It also banned entry of passengers from the
three countries. Airlines cancelled flights from Philippines to China resulting in some
passengers were stranded from their current location.

A lot of reports in different cities that Face masks were sold immediately in
different pharmacy and shortage of this item will soon be certain, and prices are
increasingly unimaginable as if it is very expensive for an ordinary citizen to afford it.

The country is experiencing a slower economic growth and this ongoing

coronavirus impact is expected to result in a subdued growth in 2020. China is
Philippines’ top trading partner accounting for 18.8% of total trade, according to the
Philippine Statistics Authority (PSA). The Central Bank of the Philippines (BSP) noted
that the coronavirus outbreak could have a major impact on Philippine economy over the
next few months. The coronavirus outbreak could cost the Philippine economy $600m or
0.8% of economic growth if it lasts for six months.

Tourism industry is a major contributor, accounting for 12.7% of the Philippine

economy in 2018, according to data from the Philippines Statistics Authority. More than
seven million foreign tourists visited the country during the first ten months of 2019.
Chinese tourists account for majority of Philippines’ tourist population. During the first
ten months of 2019, a total of 1.49 million Chinese tourists visited the Philippines,
according to the Department of Tourism (DOT). Philippine tourism officials expected to
attract four million Chinese tourists by 2022, before the outbreak happened. The tourism
industry, however, is expected to witness a major impact as the country closed its borders
with China and other countries due to the coronavirus infection.
 The Philippine government likely reached its target of 8.2 million tourists in 2019,
which is aligned with Colliers Philippines’ forecast. Meeting the target in 2020 however
will be a challenge due to the coronavirus threat. The imposition of a travel ban to and
from China is likely to adversely affect tourism. It was projected Metro Manila hotel
occupancy to reach 70 percent in 2020, lower than the 72 percent posted in 2019 due to
the delivery of more hotel rooms in Metro Manila. But the coronavirus scare has
compelled us to adjust our hotel vacancy forecast. Assuming a sustained pace of arrivals
from other major sources such as South Korea, Taiwan, and the United States, and
factoring in a significant decline in Chinese arrivals, we see hotel occupancy in Metro
Manila declining to about 63 to 65 percent.

METHOD:

 Internet Data Collections

 Search for recent information regarding the impact on businesses
 Selection of the Hotel industry which will be used as a sample for
computation

COMPUTATION:

Hotel Industry

8,200,000 Tourist in previous year

72% occupancy rate of Hotel
63% and 65% decline in current month

8,200,000 3000 + 8000

Divide by 12 2
683,333 =5,500 Avg Price Hotel rooms

683,333
x .93 635,500
635,500 x 5,500
3,495,250,000

Individual Taxpayer Corporate Taxpayer

3,495,250,000 3,495,250,000
x 35% x 30%
1,223,337,500 1,048,575,000 Tax to be paid
2,410,000
1,225,747,500 Tax to be paid
Implication on the Collections of Taxes
from Individuals and Corporations
Income Tax on Businesses

Business and Transfer Taxation

Group 2

Mary Ruth N. Baldevia

Regginald Tirso I. Morales
Julz Hussein Bakun
Janice Bidua
Rexelle Dasal