DOF withdraws tax hike proposals due to strong Q1 revenue growth

The Department of Finance (DOF) has withdrawn its proposals for raising capital gains, donor's, and estate taxes due to robust revenue collections in the first quarter.

Finance Secretary Ralph Recto stated that strategic measures were prepared but are not necessary at this time because of the country's strong financial position, citing a 13.55% growth in total tax collections to P931.5 billion in Q1 2025.

House Ways and Means Committee Chair Rep. Joey Salceda welcomed the DOF's decision, noting concerns about higher capital gains taxes potentially triggering capital flight and hindering economic growth.

Salceda suggested imposing higher taxes on luxury goods instead to avoid discouraging asset reallocation and impacting essential areas like small business development or middle-class needs.

The government is now focusing on exploring non-tax revenue sources and managing its deficit and debt levels, with a projected 16.72% of GDP in revenues for the year.