FIRST HALF collections generated by the Tax Reform for Acceleration and Inclusion (TRAIN) law amounted to P55.6 billion, up 65% year-on-year and exceeding the target by 6.8%, the Department of Finance (DoF) said.
It said in a statement that the main generators of marginal revenue were the personal income tax, the petroleum excise tax, and the tobacco excise tax, among others.
“The major gains were seen in the personal income tax, petroleum excise tax, sweetened beverage excise tax, tobacco excise tax, and the documentary stamp tax (P21.8 billion more in total),” the DoF said.
The DoF said TRAIN’s reduction of personal income tax rates produced a smaller revenue loss than expected. The DoF had estimated than in the first half would produce a reduction of P64.5 billion in income tax collections, but the reduction was only P52.5 billion, a net gain or P11.9 billion.
“This is due to better compliance, increase in registered taxpayers, and lower unemployment and underemployment rates,” the DoF said.
Collections from the petroleum excise tax amounted to P54.4 billion, exceeding the target by 6.7%. The tobacco excise tax generated P8.1 billion during the period, 33.9% above target.
The DoF said sweetened beverage tax collections totaled P24.9 billion, beating the target of P23.4 billion, while taxes from documentary stamps exceeded the target by 16.3% at P20 billion.
“Sweetened beverage (SB) excise tax is above target by P1.5 billion due to improved compliance as result of the issuance of a revenue regulation that provided clear guidelines on the coverage of the SB excise tax. This also resulted in the increase in the number of non-large taxpayers from 36 to 42,” the DoF said.
It said the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC) both exceeded their targets, by P1.9 billion and P1.7 billion, respectively.
Missing targets were the excise tax on automobiles and the value-added tax (VAT), which the DoF attributed to lower volumes of imports and a surge in input VAT.
Revenue from the automobile excise tax was P1.2 billion, only 13.4% of the P8.9 billion target, after auto imports declined 8.3% year-on-year in the five months to May, it said.
VAT revenue generated by the BIR also fell well short with collections of P3.9 billion, against the target of P7.5 billion due to the “surge in input VAT, which reflects higher capital investment, given the infrastructure program,” the DoF said.
The BoC’s VAT collections amounted to P1.2 billion, also missing the P5.4 billion target, after only six taxpayers who were previously exempt reported imports on which VAT could be collected.
Republic Act No. 10963, or the TRAIN Law took effect in January 2018 as the first package of the Comprehensive Tax Reform Program (CTRP). This lowered personal income tax but increased taxes on oil, automobile and tobacco products, among others. — Beatrice M. Laforga