DOF estimates first phase of tax reform package to yield

The first tax reform package would generate only about three-fourths of the initial expected net revenue from the bicameral conference committeeapproved Tax Reform for Acceleration and Inclusion (TRAIN) bill.

Latest preliminary estimates of the Department of Finance (DOF) showed that if President Rodrigo R. Duterte signs the bicam-approved TRAIN bill as is, the measure would yield about R92 billion in net revenue on its first year of implementation.

The new DOF estimate on TRAIN’s net revenue gain is lower by 29 percent compared with the initial assumption of about R130 billion.

But the according to a Finance official who declined to be identified, the expected revenue from the TRAIN bill would further increase if Congress approves the DOF’s supplemental proposal that will raise the motor vehicle user’s charge (MVUC).

“Congress promised that they will adjust the MVUC, once that is approved, the expected net revenue from the first tax reform would amount close to R130 billion,” the source said.

Today, the MVUC ranges from R2,000 to R12,000 annually, depending on the size and age of the car. Based on latest data from the Land Transportation Office, the Philippines had about 9.25 million registered vehicles as of 2016.

Data from the Bureau of the Treasury showed the government collected R13.37 billion in MVUC last year, up by 18 percent from R11.3 billion in the previous year.

At end-October this year, the Treasury data revealed that revenues from MVUC already reached R13.42 billion.

Following the reduction of the projected net revenue gain from the tax reform, Socioeconomic Planning Secretary