The Internal Revenue Agency (BIR) said VAT (VAT) generated 467 billion pesos in the first seven months, with a collection target of Phillipsos of 473.41 billion in its collection target alone.
According to documents released to reporters, BIR collected 46.74 billion pesos, an increase of 9.17% from the same period last year.
VAT is levied 12% on goods sold, traded, traded or leased goods or property and services and on imports to the Philippines.
According to the 2026 expenditure and financing information budget, the government will receive P328.9 billion pesos for consumption tax on selected goods over the entire year.
Analysts say the proposal to reduce VAT could reduce stress on households, but warn that the move could damage government revenue and complicate fiscal mergers.
“This can increase household purchasing power and help reduce the return burden of the excise tax, especially for low-income groups,” said John Paolo R. Rivera, a senior researcher at the Philippine Institute for Development.
But, Mr Rivera said the trade-off could lead to delays in reducing public debt.
Rep. Antonio Lewester, Batangas (Leandro L.
Finance Minister Ralph G. Rector (Ralph G.
“The key is timing. This may be more feasible once fiscal conditions improve, such as when debt to GDP (gross domestic product) is close to 40%, (3% of GDP) deficits,” Rivera said.
According to the Ministry of Finance, at the end of July, sovereign debt hit P17.56 trillion US dollars, violating the government’s full-year forecast for 2025.
This brings the highest level of debt-to-GDP ratio since 2005 to 63.1%, surpassing the 60% debt-to-GDP threshold for multilateral lenders who believe can manage economies.
The government believes that the deficit-to-GDP ratio is 4.3% by 2028 and 3.1% by 2030.
“In view of the basic goods and services that benefit the poor, it is unwise to expand the exemption of VAT, especially. They lead to inefficiency, leakage, loss of income,” said Filomeno S. Sta. Economic Reform Action Coordinator Ana III said through Viber. – Aubrey Rose A. Inosante
