Distributional Implications of the Vat Reform in the Philippines

30 Pages Posted: 23 Aug 2007

Date Written: July 2007

Abstract

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. To alleviate the impact of the reform on the poor, several mitigating measures were introduced. 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.

Keywords: Working Paper

Suggested Citation

Newhouse, David Locke and Zakharova, Daria, Distributional Implications of the Vat Reform in the Philippines (July 2007). IMF Working Paper No. 07/153, Available at SSRN: https://ssrn.com/abstract=1007902

David Locke Newhouse

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Daria Zakharova (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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