MANILA – Filipino taxpayers have reaped a cash bonanza of PHP111.7 billion in personal income tax (PIT) cuts in 2018 with the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the first package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP), the Department of Finance (DOF) said.
In a recent DOF executive committee (Execom) meeting, the Strategy, Economics, and Results Group (SERG) led by Undersecretary Karl Chua also reported that TRAIN revenues reached PHP68.4 billion, which is PHP5.1 billion or 8.1 percent higher than the full-year target of PHP63.3 billion.
The SERG report explained that the largest gains were seen in tobacco excise, auto excise, and documentary stamp tax collections. PIT collections were also higher than expected due to better compliance and an increase in the number of registered taxpayers. Taken together, these highest gainers contributed about PHP51.5 billion of the PHP68.4 billion of additional revenue from TRAIN.
Auto excise tax revenue was above target by PHP6.2 billion, owing in part to higher purchasing power for vehicles.
Documentary stamp tax revenue was also above target by PHP4.7 billion, because of higher transactions value and better collection efficiency.
Accounting for VAT from additional spending, estimated at PHP24.6 billion, which was due to additional take-home pay as a result of lower personal income taxes, TRAIN revenue has far exceeded its target, providing additional public resources for infrastructure and human capital development programs, the SERG report stated.
The DOF previously estimated that the implementation of TRAIN gave a combined PHP12 billion per month in additional income to the country’s individual taxpayers, most of them compensation earners, and in unconditional cash transfers to the poorest households and senior pensioners.
With TRAIN, taxpayers with a net taxable income of PHP250,000 and below are exempted from paying personal income taxes. Those earning less than PHP8 million annually also get PIT cuts under TRAIN.
Assistant Secretary Antonio Lambino II, who is DOF spokesperson, said the notable increase in retail sales — in malls, restaurants, and other dining places — after the law took effect in January 2018 indicates the higher purchasing power of consumers as TRAIN put more money into the pockets of 99 percent of Filipino income taxpayers.
He said that retail giants and fastfood chains, such as Robinsons Retail Holdings Inc., Philippine Seven Corp., Puregold Price Club, and the Max’s Group Inc., have all reported increases in sales in 2018, after the implementation of TRAIN started.
“The significant growth in sales reported by retail establishments and restaurants point to the fact that people now have more money to spend as a result of the hefty PIT cuts under TRAIN, which is now benefiting 99 percent of our taxpayers,” Lambino said. (PNA)
