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HOLY TRINITY SCHOOL

of Padre Garcia, Bats., Inc.
SeniorghIGH
School

APPROVAL SHEET

This study entitled "THE IMPORTANCE OF TRANSPARENCY AND

ACCOUNTABILITY OF COLLECTED TAXES AND THE IMPACT OF TAX
INCENTIVES FOR THE ECONOMIC GROWTH AND INDUSTRIAL
DEVELOPMENT OF THE MUNICIPALITY OF PADRE GARCIA,
BATANGAS", prepared and submitted by Aldrich Evann C. Bunyi, Vida
Ann Rose A. Capuno, Charlie May B. Dimayuga, Shanelle Samantha M.
Marasigan, Joseph Russel E. Nicodemus, Sheelah P. Villapando, in partial
fulfillment of the requirements for the subject Practical Research I, has
been examined and is recommended for oral examination.

QUEEN MARYGOLD B. LOISAGA

Research Adviser

Approved by the committee on Oral Examination with a grade of

PANEL OF EXAMINERS

CRISTINE JOY H. DIMACULANGAN

Chairperson

JESUSA MARIE M. DACUYA YSEAH DENISE T. LACERNA

Member Member

Accepted and approved in partial fulfillment of the requirements for

the subject of Practical Research I.

EDITA S. DIMACULANGAN, MAEd

… Date School Directress
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THESIS ABSTRACT

TITLE : “The Importance of Transparency and

00000 Accountability of Collected Taxes and the

00 Impact of tax incentives for the Economic

00 Growth and Industrial Development of The

00 Municipality of Padre Garcia, Batangas"

RESEARCHERS : Aldrich Evann C. Bunyi

Vida Ann Rose A. Capuno

Charlie May B. Dimayuga

Shanelle Samantha M. Marasigan

Joseph Russel E. Nicodemus

N Sheelah P. Villapando

TYPE OF DOCUMENT : Unpublished Thesis

LEVEL : 12

STRAND : ABM

YEAR : 2022

INSTITUTION : Holy Trinity School of Padre Garcia,

Batangas.,Inc.
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ADDRESS : Poblacion, Padre Garcia, Batangas

NO. OF PAGES :

ADVISER : Ms. Queen Marygold B. Loisaga

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SUMMARY
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ACKNOWLEDGEMENT

The research paper would have been impossible to complete

without the assistance of those people around us. With all of that, we

would like to express our heartfelt gratitude and appreciation to everyone

who supported and assisted the researcher from the start of the research

process until the end, as well as for their recommendations, guidance, and

support in the completion of this study;

To Mrs. Edita S. Dimaculangan, School Directress, for allowing the

researchers to conduct this study during the blended learning set up

amidst the pandemic;

To Ms. Yseah Denise T. Lacerna, English Teacher, for her

feedbacks, advice for the enrichment of the research paper, and her

assistance to the researchers despite her busy schedule;

To Ms. Jesusa Marie M. Dacuya, Language Teacher, for her

feedbacks, recommendations for the enrichment of the research paper,

and her assistance to the researchers as the questionnaire validator

despite her busy schedule;

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To Ms. Cristine Joy H. Dimaculangan, Chairperson of the Panel, for

her comments, suggestions for the improvement t of the study, and her

assistance to the researchers despite her busy schedule;

To Ms. Queen Marygold B. Loisaga, Research Adviser, for her

guidance that aided the researchers to finish this study, suggestions for the

improvement of the research paper, feedbacks every chapter, assistance

in the study despite her busy schedule, and for teaching the researchers

how to properly construct a research paper;

To the researchers’ parents, for their unwavering love, sacrifices,

and words of encouragement, for their moral support as we gave our all to

this research, and for constantly inspiring and motivating us to complete

this study;

Most especially, to the Almighty God, who makes all things possible,

for giving us strength to get through all the difficulties that the researchers

faced, gift of knowledge, and ability to finish this study, in His name, the

researchers offer this study.

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DEDICATION

This study is wholeheartedly dedicated

To our beloved parents and friends

Who have been our source of inspiration and strength

To our teachers and classmates,

Who served as the beacon of light for guiding us

And most especially,

To our Almighty God

Who grants us the wisdom, protection and power of mind at all times,

All of this we offer to you.

A.E.C.B | V.A.R.A.C |

C.M.B.D |S.S.M.M |

J.R.E.N | S.V.P
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TABLE OF CONTENTS

TITLE PAGE………………………………………………………….…….…….i

APPROVAL SHEET……………………………………………….……….…...ii

THESIS ABSTRACT…………………………………………………….……..iii

SUMMARY…………………………………………………………………….…v

ACKNOWLEDGMENT…………………………………….…………………vi

DEDICATION…………………………………………………..………….…...vii

TABLE OF CONTENTS………………………………………….……..……viii

LIST OF TABLES………………………………………………………...........xi

LIST OF FIGURES…………………………………………………………..…xii

CHAPTER

I. THE PROBLEM

Introduction………………………………………..………..…..…1

Statement of the Problem…………………………..……..…..…6

Scope, Limitation, Delimitation of the Study…………….....…..7

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Significance of the Study…………………………...…….………8

II. REVIEW OF LITERATURE

Conceptual Literature……………………………………….…..10

Research Literature……………………………………….….…14

Synthesis……………………………………………….…….…..20

Conceptual Framework………………………………..………..22

Definition of Terms……………………………………………...26

III. RESEARCH METHOD AND PROCEDURES

Research Design………………………………………….….….28

Subject of the Study……………………………….……....……28

Data Gathering Instruments………………………….…..…….30

IV. PRESENTATION, ANALYSIS AND INTERPRETATION…….…...33

V. SUMMARY, CONCLUSION, AND RECOMMENDATION

Conclusions……………………………………………… .….….47

Recommendations…………………………… …………....…..48
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PROPOSED ACTION PLAN……………………………………………….…50

BIBLIOGRAPHY........................................................................................54

APPENDICES

A. Letter of Validation

B. Letter for Administration of Questionnaires

C. Letter to Grammarian

D. Certification from the Grammarian

CURRICULUM VITAE
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LIST OF TABLES

Table Title Page

1 Table1: Distribution of Respondents 29

2 Table 2: Proposed Action Plan 50

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LIST OF FIGURES

Figure Title Page

1 Research Paradigm 24
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CHAPTER I

THE PROBLEM

Introduction

The twin concepts of "transparency" and "accountability" are

important pillars of democratic governance in modern societies. Webster's

English Dictionary defines the term "accountability" in two ways. First, it is

"the quality or state of being accountable." Second—and this is particularly

relevant to public officials—the term could also refer to "the obligation or

willingness to accept responsibility or to account for one's actions."

Transparency and accountability are critical for the efficient functioning of a

modern economy and for fostering social well-being. In most societies,

many powers are delegated to public authorities. Some assurance must

then be provided to the delegators—that is, society at large—that this

transfer of power is not only effective, but also not abused. Without

transparency and accountability, trust will be lacking and the result would

be social instability and an environment that is less than conducive to

economic growth.
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In addition, GIFT (2022) defined Tax transparency as the disclosure

and publication of quantitative and qualitative data about the tax system,

that a society needs to hold decision makers to account and to reach

informed judgements on how the tax system is performing during a

particular time period. It is a process that supplies the information required

to ensure that a tax system works for the benefit of all stakeholders – in

and out of government – tax administrators, other government officials,

legislators, those who elected them, and those who pay taxes, including

any identified disadvantaged and marginalized groups. The information

made available through a tax transparency framework is part of an

integrated process that includes the collection, analysis, scrutiny and

dissemination of data, and the subsequent discussion of tax system

performance, as well as the broader fiscal framework that includes the

spending side of public budgets.

Moreover, Rabinowitz (2011) Tax incentives – tax credits,

deductions, or reduction or forgiveness – can be used by communities,

states, or the federal government to obtain desirable economic, aesthetic,

and social ends. They can help convince developers to build affordable

housing or restore historic buildings for new uses, persuade corporations

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to move operations into depressed areas, or encourage businesses and

individuals to conserve energy and protect the environment. Tax incentives

can accomplish more than the specific purposes they’re aimed at. By being

the carrot that’s used instead of, or in addition to, the stick of regulation,

they make recipients into partners in trying to reach community goals,

rather than adversaries. They can change the whole way developers or

corporations look at doing certain kinds of business, and leave them willing

to continue in directions that benefit the community as well as themselves.

Francis (2016) states that whether tax incentives achieve their goals

of attracting and retaining business investment, they are not likely to

disappear anytime soon. They are popular economic development tools

even among low-tax states such as Nevada, which offers significant tax

incentives even though the state does not have an income tax. Strategic

planning can help states determine which industries they want to protect or

attract with tax incentives to diversify their economies. But careful

evaluation and monitoring is necessary to ensure that the incentives are

achieving goals. New requirements to report tax abatements in financial

statements will help make some incentives more transparent, but

comprehensive incentive reports are still important. Many states report tax
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expenditures, but few publish explicit reports on incentives that include

performance measures.

According to Kristoffersson et al. (2013) the issue of tax

transparency plays a significant role not only in academics, but also in

general practice. The collection and treatment of information by tax

authorities has been a highly discussed issue in recent years, both in the

ambit of national legal communities and supra-national organizations, such

as the OECD and the EU. Transparency provides the government a great

opportunity to enhance taxpayers’ compliance. When taxpayers perceive

that the government is not transparent they will react by trying not to pay

taxes. Feeling of transparency could create sense of trust among

taxpayers. When taxpayers trust a tax institution, they are willing to be

vulnerable to the tax institution’s actions, confident that their rights and

interests will not be abused.

According to Akitoby (2018), a low level of taxation will endanger the

development of our economy. As well as the tax collection will be the focal

point of all financial services in our economy. Tax generates the state

budget revenue and is a tool to regulate the economy. Considering that

collection of taxes and fees are the fundamental ways for countries to
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generate public revenue, which allows them to finance investments in

human capital, infrastructure, and the delivery of services to citizens and

businesses. The government needs to collect high level of tax to sustain

the needs of the country.

According to Jelilov et al. (2016) favorable tax reforms improve the

revenue generating capacity of government to undertake socially desirable

activities that translate to economic growth in real output and per capita

basis. He recognized that tax had a positive impact on the economy. It is a

major player in every society of the world. However, it is recommended

that sustainable economic growth can be heightened through taxes in line

with macroeconomic objectives, corrupt-free and efficiency in tax policies

of the government, alongside, accountability and transparency of

government officials. The tax system is an avenue for government to

collect additional revenue that is needed in discharging its immediate

obligations. A tax system serves as one of the most effective means of

mobilizing a nation’s internal resources and it lends itself to creating an

environment conducive to the promotion of economic growth.

According to Durante (2021), some tax reforms are in response to

economic development. The impact of tax changes on economic growth,

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expressed as a change in real GDP. Failure to account for other factors

influencing economic growth, such as government spending and monetary

policy, may result in an understatement or overstatement of the impact of

taxes on growth. The government used tax to carry out their traditional

functions, such as providing public goods, maintaining law and order,

defending against external aggression, and regulating trade and business

to ensure social and economic stability. Positive outcomes necessitate

striking a balance between the goals of efficiency, equity, simplicity, and

revenue generation.

According to Drogalas et al. (2018) the state has to gain the trust of

its citizens in order to increase tax ethics and tackle tax evasion, by

allocating its resources efficiently and by promoting political transparency.

The more taxes and more transfers per capita, the more financial

information is disclosed and, accordingly, the higher the transparency is.

Government transparency is important for strengthening accountability,

reducing corruption, and enhancing good governance. Tax transparency

has a positive impact on developing countries as it provides benefits, such

as boosting their revenue collections and tax base. Governmental

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transparency allows the public to develop a more accurate picture of what

is happening inside a government.

The reason that invokes the researchers to conduct this study is to

know further how important transparency and accountability of collected

taxes and the impact of taxes incentives in the economic growth and

industrial development. The researchers want to analyze the citizen's

perceptions to the taxation system by the Municipality. This study will help

the researchers to know the challenges that may arise from the proper

collection, handling and usage of tax incentives. Appropriate taxation

policies, reforms, and programs, included in the recommendations and

action plan of the research, will help actualize the intentions of the citizens,

especially the taxpayers, who are bearing the brunt of a sluggish economy.

The researchers expect that the information gathered from this research

will create an impact on the researcher’s and citizen’s lives not just in

terms of taxation and economics but also in other life aspects.

Statement of the Problem

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This study aims to inspire the youth and influence an entrepreneurial

culture that fosters personal development and economic growth. As well as

to support youth workers to develop their understanding and competencies

in entrepreneurial learning. More specifically, it aims to answer the

following questions:

1. What is the importance of transparency of collected taxes to the

citizens of Padre Garcia and the impact of tax incentives in terms of

municipality's projects and development?

2. What are the obstacles the municipality encountered with regards to

transparency and accountability of collected taxes and the influence

of tax incentives in developmental projects and activities?

3. What are the benefits of accountability and transparency in tax

collection?

4. What are the planned action programs that can ensure transparency

of collected taxes to be use for economic growth and industrial

development in order to acquire the community’s trust?

Scope, Limitations, and Delimitations

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This study is conducted in Holy Trinity School of Padre Garcia Bats.,

Inc. For the current academic year 2022, the researchers conducted their

research. The primary goal of the study is to gain further insight into the

significance of tax collection and its transparency in the Municipality of

Padre Garcia, Batangas. Additionally, the researchers also aim to give new

information about having an accountability of tax incentives in regards with

the industrial growth of a municipality. Through this, it can influence the

citizens and business owners to engage in behavior that is socially

responsible that can contribute to the development of a municipality.

The researchers limited their study on how important transparency and

accountability of Collected taxes and the impact of tax incentives in the

economy of the Municipality of Padre Garcia Bats. Moreover, the

respondents were limited upto sixty (60) citizens, taxpayers, and municipal

officials. Survey questionnaires were formulated to gather some datas and

informations from the respondents. The printed questionnaires were

handed to chosen individuals. Informations needed from the chosen

individuals were gathered in the estimated time given.

Considering that this study focuses on the transparency and accountability

of collected taxes and their impact in our sector in the Municipality of Padre
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Garcia, as well as an overview of their perspectives and concerns

regarding the taxes that they pay. This research will cover several

subjects, including the various programs that can assure the community's

trust, the challenges to the collected tax, and the things that allow them to

provide transparency in the collected taxes. Although the study focuses on

intentionality, it is possible that in the future, intentions will not become

actual acts. This research limits on seven factors: (1) target

population/respondents (2) data collection (3) limited outcomes (4) data

limitations, (5) limited access to information, (6) conflicts on biased views

and personal issues, and (7) lack of previous studies in the same field. The

data gathered was based on responses from residents who pay taxes. The

data gatherings will be limited to residents of the Municipality of Padre

Garcia, Batangas, and will exclude any outcasts and outsiders due to the

researcher's strict guidelines. The residents and taxpayers of Padre

Garcia, Batangas, will serve as the primary source of date collection.

Significance of the Study

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We aim to create the following impacts on the institutions stated

below through this study:

TO THE CITIZENS OF THE MUNICIPALITY OF PADRE GARCIA, this

study aims to give information about where their taxes are going and its

impact in the economy of the municipality. In addition to gaining their trust

and being upfront about the taxes they pay. This is not only designed for

citizens who pay the tax alone, but also for pupils and certain adults to use

as a guide in them.

TO THE TEACHERS, this study wants to give teachers new information

about having a transparency and importance of tax collection. With this, we

hope that the students and teachers can share with each other their

thoughts and ideas to build a better municipality.

TO THE SCHOOL, this study hopes to provide more academic information

on individuals that can be taught in accounting/auditor courses.

TO THE STUDENTS, this study aims to give an overview for the students

who aspire to become an auditor or an accountant. This research will give

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knowledge that they may use as they study to become one of those who

work within the economy.

TO THE AUDITORS OR ACCOUNTANTS, this study hopes to give a

perspective on how important transparency and accountability is to them

together with the citizens. With this we hope that the relation within those

who work within the economy and the citizens will not lead into doubts and

misunderstanding.

TO THE FUTURE RESEARCHERS, this study hopes to provide enough

information that other researchers can use in their own studies. The

researchers also hope that the references used in this study can be a way

for future researchers to discover a wider scope of references for their own

researches.