THE GOVERNMENT’S “impressive” fiscal performance was sustained in May, the Finance chief said, adding that this showed successful implementation of Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law.
“To give you the latest preliminary figures, from January to May this year, the national government revenues rose by 20% year-on-year. Tax revenues also grew by 20%,” Finance Secretary Carlos G. Dominguez III said in a speech during the Korea Business Forum in Seoul on Tuesday, a copy of which was given to reporters yesterday.
The revenue growth Mr. Dominguez cited was largely steady from the 21% average increase logged in January-April, which also saw tax growth average 20%.
“Collections of the Bureau of Internal Revenue improved by 17% and Bureau of Customs (BoC) collections grew by 31% over the same period of last year,” Mr. Dominguez said, sustaining increases in the first four months.
He added that May “disbursements were higher by 30.4% than the 2017 level” in the wake of the 31% increase reported in the four months to April.
“The impressive increase in revenues — particularly in tax collections by the revenue agencies for the first five months of 2018 — is a result of the effective implementation of the tax reform law, and this enabled the government to sustain its aggressive spending policy without breaching the programmed budget deficit,” Mr. Dominguez said.
RA 10963 reduced personal income taxes while hiking or adding taxes on various items, while withdrawing value-added tax exemptions of various sectors when the law came into force on Jan. 1.
Latest Treasury data show the country’s fiscal balance at a P105.86-billion deficit as of April, more than three times the P30.2 billion logged in the same four months last year. Revenues totaled P927.4 billion in the January to April period, and P840 billion of this amount are in tax revenues. Overall disbursements meanwhile stood at P1.033 trillion.
In a separate press release yesterday, the BoC said it raked in P52.6 billion in May, up 32% from the P39.84 billion collected in the same month last year, exceeding expectations for the fourth consecutive month.
It also breached its P50.63 billion target by about 3.9%, after 16 of its 17 ports nationwide beat their respective collection goals. Only the Manila International Container Port was unable to hit its target of P15.611 billion, collecting P14.199 billion in May.
“The value of imports also grew by 17.8%. I will say this is because of the continuing application of correct valuation and tariff classification of goods,” Customs Commissioner Isidro S. Lapeña was quoted as saying, while noting that import volume grew by 3.3% in May.
The BoC attributed the surge in collections to the depreciation of the peso versus the dollar, higher global oil prices, as well as increased importation of motor vehicles, crude oil, food, iron and steel, and other petroleum products.
BoC collections in January-May totaled P230.18 billion, 31.63% up from P174.86 billion recorded in the same five months in 2017.
Mr. Dominguez also told South Korean businessmen that the government is pushing a second tax reform that will cut corporate income tax rates and streamline incentives. “This tax reform that we are planning in the second round is a companion measure to our Build, Build, Build program. We would like the small and medium business enterprises to take advantage of the new infrastructure that we are constructing outside the Metro Manila area,” he said. “In order to be able to achieve this, we would like to appeal to the companies that have been receiving an equivalent of P300 billion a year in tax credits to share part of their benefits with the small and medium enterprises, which incidentally hire more than 90% of all our workers in the country. They are our target to help in the second round.” — Elijah Joseph C. Tubayan