TRAIN boosts tax collection by P12.5 billion in Q1
The implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law helped the Bureau of Internal Revenue (BIR) boost its collections by ₱12.5 billion in the first three months, the agency said yesterday.
According to data presented by the BIR during a hearing at the House of Representatives, collections due to the TRAIN Law recorded a net gain of ₱12.5 billion in the first quarter.
This was a reversal from the ₱3.2 billion net loss programmed by the government during the first quarter of implementing the law. Broken down, revenue losses from personal income tax collections reached only ₱23.34 billion in the first quarter, lower than the expected revenue loss of ₱36.04 billion.
“We can only surmise that some of this or the balance can be attributable to our field performance, especially the enforcement processes in our revenue regions,” BIR assistant commissioner Alfredo Misajon said during the hearing of the Congressional Oversight Committee on the Comprehensive Tax Reform Program.
There was also a ₱3 billion decrease in the value-added tax (VAT) collections from January to March, in contrast with the expected gain of ₱4.21 billion. Gains from petroleum excise tax amounted to ₱4.73 billion, lower than the ₱9.99 billion goal; while automobile excise tax climbed by ₱363.71 million, also lower than expected.
On the other hand, the increase in the excise tax on tobacco due to TRAIN during the period was significantly higher than expected at ₱14.97 billion, as compared to the P686 million goal.
Misajon said this is due to unchanged consumption behavior of smokers, and frontloading on the part of the manufacturers in anticipation for higher excise taxes. Excise tax collection on sugar-sweetened beverages was mostly on target with P7.7 billion actual collection as compared to the P7.78 billion goal.
The TRAIN Law, as contained in Republic Act 10963, aims to simplify the country’s tax system by lowering personal income tax rates. It also seeks to adjust excise taxes of fuel, automobile, coal and sugar-sweetened beverages, and expand the tax base by removing value-added tax exemptions. BIR collections amounted to ₱423.08 billion in the first quarter, 14.16 percent higher than the ₱370.61 billion recorded in the same period in 2017. This was also 16.95 percent higher than the ₱361.77 billion target for the period.