TRAIN Revenue Exceeded Government Target
Additional revenues from the Tax Reform for Acceleration and Inclusion (TRAIN) Act exceeded the government’s target by 8.1 percent in 2018 even as the law also allowed taxpayers to take home more money with their lower personal income tax rates.
The Department of Finance (DOF) released a statement earlier on Thursday quoting their strategy, economics, and results group (SERG). The announced that TRAIN law’s net revenues last year amounted PHP68.4 billion, higher than the PHP63.3-billion goal. Finance Undersecretary Karl Kendrick T. Chua led SERG, he is also spearheaded Duterte administration’s first of seven tax reform packages.
According to the DOF, the largest gains were seen in tobacco excise, auto excise, and documentary stamp tax collections. Personal income tax collections were also higher than expected due to better compliance and an increase in the number of registered taxpayers. Auto excise taxes surpassed target by PHP6.2 billion, while collections from higher documentary stamp taxes were above target by PHP4.7 billion. Taken together, these highest gainers contributed around PHP51.5 billion of the P68.4-billion additional revenue from TRAIN.
Value-added tax (VAT) from additional spending rose to PHP24.6 billion, which can be credited to the additional take-home pay as a result of lower personal income taxes. The restructured personal income tax system that raised the tax-exempt cap to PHP250,000 allowed workers to receive an additional PHP111.7 billion last year.
The revenue has far exceeded its target, providing additional public resources for infrastructure and human capital development programs.
Based on DOF’s said estimated, TRAIN amassed a combined amount of 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.