IMF sees room for Phl to introduce additional taxes

The International Monetary Fund (IMF) said the Philippines has room to introduce higher taxes amid expectations of fiscal consolidation continuing at a slower pace over the medium term.

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IMF mission chief Elif Arbatli Saxegaard said while the Philippines could raise revenues by improving tax collection efficiency, the government could also propose new tax measures.

“We do believe that there is significant scope to raise revenues through tax administration measures,” she said. “But we also think that there is room to raise revenues through higher tax policy measures. The timing is important to implement those measures.”

Finance Secretary Ralph Recto earlier said it’s possible that there will be no new taxes until 2028 as the government would try to focus on improving tax administration first.

“Revenue mobilization remains critical to sustain a credible medium-term fiscal consolidation strategy, rebuild buffers and create space for poverty reduction efforts,” Saxegaard said.

“Tax administration improvements should be supplemented with tax policy changes, notably to improve the efficiency of value-added tax and broaden the tax base.”