The paper evaluates the tax performance of the National Government (NG) during CY 1996-1997. It notes that despite a P35 billion shortfall, the National Government's tax collection increased by 12% from P370.2 billion in 1996 to P414.6 billion in 1997. Total collections from direct taxes reached P170.4 billion while those from indirect taxes amounted to P244.2 billion.