THE government should focus on fiscal management rather than raising taxes if it wants to increase revenues, a World Bank economist said.

"The point here is that you can increase your tax collection without increasing rates through better tax administration," World Bank lead economist Gonzalo Varela told reporters on Wednesday.

"There is a lot of space, I would say, through better tax administration and also through a... broadening of the tax net," he added.

Varela pointed out that improvements were needed in both expenditure efficiency and tax administration for revenue mobilization.

He noted that tax rates in the Philippines were comparatively high compared to other countries in the region. Tax collection efficiency, however, is lower.

Numerous exemptions, especially for value-added taxes, were also said to have created distortions that were affecting resource allocations and reduced the ability to collect taxes efficiently.

Last year, then Finance Secretary Benjamin Diokno noted the need to review VAT exemptions and said the government had sought assistance from the International Monetary Fund.

"The more exemptions you have, then the less you're going to collect," Varela said.

"Making decisions on streamlining these exemptions, reducing these exemptions can be a way of increasing tax collection without having to increase tax rates," he added.

Digitization and the introduction of new methods could help boost revenues, and Varela also said that behavioral science offered insights into encouraging taxpayers to settle their obligations.

Similar interventions have already proven effective in other countries, he claimed.