THE country’s tax effort from January to September this year reached 15.2 percent, with the growth attributed mostly to the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law, the Department of Finance (DOF) has reported.
This was described as the highest tax effort ever achieved by the government for a three-quarter period.
A DOF economic bulletin said the nine-month tax effort represented modest growth of 0.7 percentage points compared to the reported 14.5 percent in the same period in 2017.
“More than a half or 0.4 percentage point is due to TRAIN and the rest or 0.3 percentage point to tax administration improvements,” the DOF said.
Of the total, the Bureau of Internal Revenue (BIR) reported a contribution of 11.6 percent coming from 11.5 percent last year, the Bureau of Customs (BOC) at 3.5 percent from 2.9 percent, and other government offices remaining unchanged at 0.1 percent.
For the same period, the government’s total tax revenue collections reached P1.897 trillion, rising by 15.7 percent compared to last year’s P1.639 trillion.
The BIR contributed P1.444 trillion to the total tax collections, rising by 11.2 percent from 1.299 trillion; the BOC with P434.6 billion, growing by 34.2 percent from P323.8 billion; and other offices at P18.7 billion, expanding by 14.5 percent from the P16.3 billion recorded last year.
“Tax revenues grew by 15.7 percent, with BIR collections rising by 11.2 percent and BOC collections rising by 34.2 percent, both exceeding the 10.0-percent nominal GDP [gross domestic product] growth. This is due to TRAIN 1 and improved tax
administration,” it added.
The government also registered a 16.9-percent revenue effort for the nine-month period, rising by one percentage point from 15.9 percent last year. The DOF again pointed out that this is “the highest ever achieved for the first three quarters of the year.”
Total revenues for the period grew 17.2 percent, reaching P2.111 trillion coming from P1.801 trillion last year. Nontax revenues amounted to P214 billion, expanding by 32 percent coming from P162.2 billion last year.
The DOF pointed out that the increase in nontax revenues came from higher collections of dividend remittances on national government shares of stocks, guarantee fees, and share in the profit of the Philippine Amusement and Gaming Corp.
“Higher collections from other offices also contributed to the increase, which included the one-off transfer of P13.5 billion in bond proceeds from the United Coconut Planters Bank [UCPB] for the Coconut Industry Investment Fund,” the DOF said.
Furthermore, expenditure effort rose by 2.2 percentage points to 20.0 percent from 17.8 percent last year, which boosts its contribution to GDP growth.
Total expenditures for the nine-month period amounted to P2.489 trillion, expanding by 23.6 percent compared to last year’s P2.014 trillion.
“Strong macroeconomic fundamentals backed by tax reforms and the ‘Build, Build, Build ’ program will continue to boost economic growth as the competitiveness of the economy rises and more jobs are created,” it added.