TRAIN adds P55.6 billion to government revenues in H1

MANILA, Philippines — The Tax Reform for Acceleration and Inclusion (TRAIN) Law raised the government’s revenues by P55.6 billion in the first half of the year, according to the Department of Finance (DOF).

Citing preliminary data, Finance Secretary Carlos Dominguez said the first semester net revenues from TRAIN are 65 percent higher compared to the P33.7 billion recorded in the same period in 2018.

The amount was also equivalent to about 49 percent of the government’s full-year TRAIN target of P113.07 billion for the year.

Without providing specific figures, Dominguez said the Bureau of Internal Revenue’s TRAIN collections exceeded the government target by P1.8 billion, while the Bureau of Customs (BOC) went over its goal by P1.7 billion.

Under Republic Act 10963 or the TRAIN law, taxpayers with an annual taxable income of P250,000 and below are exempted from paying personal income taxes. Those earning less than P8 million annually also get personal income tax cuts.

The law also increased excise taxes on fuel, automobile, coal and sugar-sweetened beverages, and expanded the tax base by removing value-added tax exemptions.

Last year, incremental revenues from TRAIN reached P68.4 billion, 8.1 percent higher than the goal of P63.3 billion. This contributed to the government’s total revenues in 2018, which reached P2.85 trillion.

“This year, we see our strong fiscal performance continuing. In the first eight months, total revenue collections reached P2.09 trillion. This is 9.5 percent, or P182.2 billion, higher than the same period last year,” Dominguez said during the Senate Finance Committee’s hearing on the DOF’s proposed 2020 budget on Wednesday.

He said tax collections grew by nearly 10 percent to P1.88 trillion, with the BIR accounting for P1.45 trillion and the BOC contributing P411.25 billion.

“We are confident this growth will be sustained in the coming period through continuing administrative reforms and the completion of the Comprehensive Tax Reform Program that will make our tax system simpler, fairer and more efficient. In both revenue agencies, we are automating processes and strengthening control measures against slippages,” Dominguez said.

Meanwhile, Dominguez also expressed confidence that the country’s fiscal deficit may widen in the remaining months of the year as the government continues to implement spending catch-up measures.

“With the catch-up spending plan we are now executing, we expect the budget deficit to widen in the remaining months of the year. We are speeding up the execution of key projects of the infrastructure modernization program,” he said.

Cumulative budget deficit for the first eight months narrowed by 57.3 percent to P120.4 billion from P282.01 billion in the same period in 2018.

This happened as public expenditures increased only 0.9 percent to P2.21 trillion as of end-August, slower than the growth in revenues.

“We will continue to implement the administrative reforms and revenue-enhancing programs to meet our revenue collection targets and sustain the country’s growth,” Dominguez said.