REVENUE collections for the first three quarters of 2018—with the implementation of the Tax Reform for Acceleration and Inclusion law—were slightly below target, but the finance secretary said that point is eclipsed by the fact that the TRAIN law put more money in the pockets of Filipinos by cutting personal income taxes (PIT).
The Department of Finance (DOF) reported that revenue collections of the government’s main collection agencies reached P41.9 billion in the nine months after TRAIN took effect on January 1, 2018.
“For the entire TRAIN law, we collected P41.9 billion, that’s only for TRAIN for the first three quarters. The target for the period was P44.3 billion. I want to emphasize that the big number there is the reduction on PIT. The reduction for the PIT for the first nine months is P102.9 billion,that is around close to P12 billion a month. That means to say that individuals had actually P12 billion a month spending power,” Dominguez pointed out to reporters.
The revenue collections from the TRAIN law of P41.9 billion during the nine-month period met 94.7 percent of its programmed target for the same period amounting to P44.3 billion.
“Don’t look at only the collection, look at what was given up, and they were given up directly to individuals…. So the TRAIN has succeeded 100 percent in that regard. In the collections for the first nine months, we succeeded 94.7 percent. In any grading, it’s not so bad,” he added.
Broken down, collections from oil excise taxes hit P43.4 billion versus a P43.3-billion target; excise tax slapped on automobiles reached P12.2 billion versus a target of P11.6 billion; tobacco excise collections were P5.9 billion versus P3.30-billion target; corporate income tax, P800 million versus P400-million target; and documentary tax stamp (DST), P49.1 billion versus P21-billion target.
“We are going over the different items, some we exceeded, some we did not. You have to remember that the estimates are estimates. Example, we exceeded the DST collection by P500 million, you know why? The estimate was wrong. Why was it wrong, because we had very little time to estimate, we didn’t have enough data…. Some of the estimates were good, some of the estimates were not so good,” he said.
Unmet targets
Meanwhile, revenue collections that failed to meet their respective target estimates under the TRAIN law include: sugar-sweetened beverages at P31.2 billion versus P43.3-billion target; other excise taxes, P2.3 billion versus P3.1-billion target; value-added tax at P3.6 billion versus P24.8-billion target; and financial taxes at P2.4 billion, versus P5.2-billion target.
The government also registered a P102.9-billion loss from the reduction of the PIT lower than its estimate of P108.7 billion; a loss of P3.7 billion from estate taxes from its P1.7 billion target; as well as a P2.3 billion loss from donors tax from its estimate of P1.3 billion for the period.
“Sometimes we make a mistake in estimates, but 94.7 percent, [it’s] not so bad. It could have been a hundred or over a hundred, it’s not so bad. It’s good,” he added.
The DOF remains confident it will hit its TRAIN annual target collection of P63.3 billion, on the back of the improved collection performance of the Bureau of Internal Revenue and the Bureau of Customs. It said the full-year impact of the TRAIN will come out in March 2019.