PH's 12% VAT yields no more than Thailand's 7%; World Bank urges collection fix

Marian Hukom/Rappler

The same implementation problem extends beyond taxes. Philippine business regulations nearly match Singapore’s on paper, but the country trails sharply in public services and day-to-day delivery, says the World Bank.

MANILA, Philippines – The Philippines imposes a 12% value-added tax (VAT), nearly double Thailand’s 7% rate, yet the two countries collect roughly the same amount of VAT relative to the size of their economies.

For the World Bank, this could suggest that the Philippines may not need higher headline tax rates as much as it needs to collect existing taxes more efficiently.

“Don’t increase tax rates. Just ask, how much are you collecting?” World Bank senior country economist Jaffar Al-Rikabi said during the launch of the Philippines Economic Update on Monday, August 3.