THE Bureau of Internal Revenue (BIR) said value-added tax (VAT) generated P467 billion in the first seven months, just under its collection target of P473.41 billion.
The BIR, according to a document released to reporters, collected P467.04 billion, up 9.17% from a year earlier.
VAT is a 12% levy on the sale, barter, exchange or lease of goods or property and services and on goods imported into the Philippines.
For the full year, the government is set to collect P328.9 billion in excise taxes on selected goods, according to the 2026 Budget of Expenditures and Sources of Financing.
Analysts said proposals to cut the value-added tax could ease pressure on households but cautioned the move may undermine government revenue and complicate fiscal consolidation efforts.
“This can boost household purchasing power and help reduce the regressive burden of consumption taxes, particularly for low-income groups,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said via Viber.
However, Mr. Rivera said the tradeoff could result in delays in reducing public debt.
Batangas Rep. Leandro Antonio L. Leviste earlier filed a measure seeking to return the VAT rate to 10%, arguing the current tax system is “regressive.”
Finance Secretary Ralph G. Recto, while serving as Senator, wrote legislation that raised the VAT rate to 12% in 2006.
“The key is timing. This may be more viable once fiscal conditions improve such as when debt-to-GDP (gross domestic product) approaches 40%, (with the) deficit at 3% (of GDP), as Secretary Recto has noted,” Mr. Rivera said.
At the end of July, sovereign debt hit P17.56 trillion, breaching the government’s full-year projection for 2025, the Bureau of the Treasury reported.
This brought the debt-to-GDP ratio to 63.1% at the end of June, its highest level since 2005, exceeding the 60% debt-to-GDP threshold considered by multilateral lenders to be manageable for developing economies.
The government sees the deficit-to-GDP ratio at 4.3% by 2028 and 3.1% by 2030.
“Expanding VAT exemptions, given that essential goods and services especially benefiting the poor are now VAT-exempt, is imprudent. They result in inefficiency, leakage, lost revenues,” Filomeno S. Sta. Ana III, coordinator of Action for Economic Reforms said via Viber. — Aubrey Rose A. Inosante