Finance Secretary Benjamin Diokno is eyeing a broader tax base for the 12% value-added tax (VAT) imposed on various goods and services.
He said there will be a review of the 29 VAT-exempt transactions to determine which of these goods and services could be taxed.
“While we [have] the highest VAT rate compared to the other countries in this part of the world, [our] VAT collection is the most inefficient at only 40%,” Diokno told reporters.
“Consumption taxes are more progressive. This indicates that as income increases, households tend to spend a smaller proportion of their income on goods and services from the informal sector,” he added.