By Melissa Luz T. Lopez, Senior Reporter
TAXES collected in the first quarter took a larger share relative to the economy to log a fresh record high, the Department of Finance (DoF) said on Friday.
“Tax effort also rose by 1.03 percentage point, from 13.44% to 14.47%, the highest first quarter tax effort ever achieved,” the DoF said in an economic bulletin.
The government collected P567.1 billion taxes between January to March, leaping 18.2% from the P479.9 billion raised during the same period in 2017 and well above the P497.3-billion program.
Broken down, collections made by the Bureau of Internal Revenue reached P423.1 billion, up 14.2% year-on-year. Duties collected by the Bureau of Customs likewise grew by a fourth to hit P129.8 billion, according to agency data.
The DoF attributed the double-digit increases to the tax reform law as well as improved tax administration.
Starting Jan. 1, the Tax Reform for Acceleration and Inclusion (TRAIN) Act reduced personal income taxes for those earning below P2 million, alongside a simpler system for computing donor and estate taxes.
Foregone revenues will be offset by the removal of some exemptions to value-added tax; increased tax rates for fuel, automobiles, tobacco, coal, minerals, documentary stamps, foreign currency deposit units, capital gains for stocks not in the stock exchange, and stock transactions; and new taxes for sugar-sweetened drinks and cosmetic enhancements.
Factoring in fees and other amounts collected by the government, total revenues reached P619.84 billion, 16.4% higher than the P532.4 billion raised during the first quarter of 2017 and beating the P536.7-billion target.
As a result, revenues collected from January to March accounted for 15.82% of gross domestic product (GDP), jumping from the 14.91% share logged during the same period in 2017.
The robust growth in state revenues will support even faster economic growth, the DoF said.
“Fiscal space expanded by TRAIN 1 and tax administration enabled government to boost investments and growth in Q1,” the agency said.
Philippine GDP expanded by 6.8% during the first quarter, led by a 25.1% surge in public construction together with a 13.6% increase in government spending, according to the Philippine Statistics Authority.
“With the implementation of infrastructure projects, the motion is set for investment-led growth,” the DoF said in a separate statement.
The government is looking to collect P82.3 billion from the TRAIN law this year, which will support the Build, Build, Build initiative of the Duterte administration.
The state intends to spend P1.068 trillion on public infrastructure projects this year, which is expected to usher growth towards the 7-8% goal for 2018.
The government intends to raise P2.846 trillion in revenues this year, 15.1% higher than 2017’s P2.473 trillion and accounting for 16.3% of GDP. In particular, additional tax collections via TRAIN are seen amounting to P124.93 billion.