Distributional Implications of the VAT Reform in the Philippines
IMF Working Papers, July 1, 2007
Source details
- Canonical URL
- Distributional Implications of the VAT Reform in the Philippines
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Bibliographic details
- Authors: David Locke Newhouse, Daria V Zakharova
- Published: July 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451867176.001
Summary
- This paper assesses the distributional impact of the recent VAT reform in the Philippines and evaluates alternative methods to mitigate the effects of the reform on poor households.
- The reform was progressive and relatively well targeted.
- Several mitigating measures were introduced to alleviate the impact of the reform on the poor.
- Although these measures reduced the adverse impact of the VAT reform for all households, a sizable amount of the benefit accrued to high-income households.
- Targeted transfer schemes have the potential to deliver a much higher percentage of benefits to the poor.
Major findings
- The VAT reform in the Philippines was progressive.
- The reform was relatively well targeted.
- Mitigating measures reduced the adverse impact of the VAT reform for all households.
- A sizable amount of the benefit from mitigating measures accrued to high-income households.
- Targeted transfer schemes can deliver a much higher percentage of benefits to poor households compared with the mitigating measures implemented.
Subject areas and keywords
- Subject: Consumption, Education, Household consumption, Income, Value-added tax
- Keywords: price, share, spending, tax, VAT, VAT reform, WP
This summary is based on the IMF Working Paper "Distributional Implications of the VAT Reform in the Philippines" (Working Paper No. 2007/153).