The Philippines has increased its tax take as a share to the economy in 2022, even as it lagged behind the regional average in collection efficiency.
According to the Organization for Economic Cooperation and Development's (OECD) Revenue Statistics in Asia and the Pacific 2024 report, the Philippines' tax-to-gross domestic product (GDP) ratio rose to 18.4 percent in 2022 from 18.1 percent in 2021.
The tax-to-GDP ratio reflects how tax and customs authorities efficiently collect revenues to make available financial resources to be spent on public goods and services.
While the Philippines' tax effort improved as it reopened its economy from stringent pandemic restrictions two years ago, the report released on June 25 showed that the ratio was below the Asia-Pacific average of 19.3 percent.
Among wealthy countries belonging to the OECD, the Philippines' 2022 tax-to-GDP was farther below the average of 34 percent.
The OECD nonetheless pointed to improvements in the Philippine government's tax-collection efficiency, citing that "from 2007 to 2022, the tax-to-GDP ratio in the Philippines increased by 2.8 percentage points from 15.6 percent to 18.4 percent."
Last year's tax effort was also the highest since at least 2007, OECD data showed.
As the Philippines is mainly a consumption-driven economy, the OECD noted that the largest share of tax revenues collected by the government in 2022 came from goods and services taxes and the 12-percent value-added tax (VAT), accounting for 25.3 percent of total.
Other taxes on goods and services accounted for 18.4 percent of Philippine tax collections two years ago; personal income tax, 17 percent; corporate income tax, 15 percent; social security contributions, 15 percent; and other taxes, 9 percent.
The Philippines' tax structure or the share of each tax in total tax revenues is similar to its peers the Asia-Pacific, African and Latin American regions, where taxes on consumption usually account for the bulk.
However, in other developing regions, corporate income tax collections have been bigger than the personal income tax take, unlike in the Philippines.
Finance Secretary Ralph G. Recto, who oversees tax and non-tax revenue collections primarily of the bureaus of Internal Revenue (BIR) and of Customs (BOC), had committed to refrain from slapping new taxes besides the still pending tax reform measures in Congress.