DoF says tax cuts starting to reflect in retailers’ results
THE DEPARTMENT of Finance (DoF) said lower personal income tax rates brought about by the Tax Reform and Acceleration and Inclusion (TRAIN) law are starting to show up in the sales results of major retailers in the first half.
“The significant growth in sales reported by retail establishments and restaurants point to the fact that people now have more money to spend as a result of the hefty (income tax rate) cuts under TRAIN, which are now benefiting 99% of our taxpayers,” Finance Assistant Secretary Antonio Joselito G. Lambino II said in a statement yesterday.
The DoF cited the first half sales growth reported by some of the country’s largest retailers like Robinsons Retail Holdings Inc. (38%), Philippine Seven Corp. (22%), Puregold Price Club (13%), and Max’s Group Inc 912%).
The DoF estimates that the law has unlocked P12 billion worth of disposable cash for consumers.
TRAIN exempted taxpayers earning P250,000 annually from paying income tax and reduced the tax rates for those earning below P8 million annually — which represents 99% of taxpayers.
It also simplified donor and estate taxes, but removed some value-added tax exemptions, increased rates collected on fuel, automobiles, tobacco, coal, minerals, and some financial taxes; and imposed new levies for sugary drinks and cosmetic procedures.
Last week, the DoF briefed the Senate on TRAIN’s role in the rise in commodity prices, arguing that the law accounted for 0.4 percentage point of July inflation of 5.7%. Instead it said the surge in global fuel prices, domestic supply issues, and a weak peso had a more significant impact on prices.
The DoF has said that greater liquidity unleashed by TRAIN pushed up demand and in turn, raised goods prices.
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