TRAIN revenues exceed target in first semester

Revenues from the newlyenacted tax reform law exceeded its target in the first six-months of the year, which dragged down the national government’s budget deficit, the Department of Finance (DOF) said yesterday.

Finance Secretary Carlos G. Dominguez III said that the tax reform for acceleration and inclusion (TRAIN) act yielded 133.7 billion in January to June this year, above by 12 percent against the target of 130.1 billion for the period.

“The TRAIN law, which you kindly passed, and which was implemented at the start of 2018, contributed 133.7 billion in revenues for the first half of the year — surpassing our target by 13.6 billion,” Dominguez said during a Congressional hearing yesterday.

“These are truly promising growth figures. Rest assured that our main revenue agencies are committed to maintain the momentum,” the finance chief added.

Based on the 2019 Budget of Expenditures and Sources of Financing submitted to Congress, the national government expects its TRAIN-1 would generate 189.93 billion in revenues this year.

Of that amount, the Bureau of Internal Revenue (BIR) should raise 115.89 billion, while the Bureau of Customs is expected to contribute 174.03 billion.

At end-June, the BIR already raised 114.4 billion from the TRAIN law, well above its 1400 million target, while the Customs was below its goal of 129.8 billion, raising only 119.3 billion.

For 2019, Dominguez said the DOF expects 1181.4 billion from the tax reform, which will help sustain the government’s strong fiscal performance and aggressive spending plan into the medium term.

Included in the 2019 tax reform revenues is an assumption that Congress will pass the proposed tax amnesty program and adjustments in the Motor Vehicle Users Charge (MVUC), which comprise Package 1-B of the comprehensive tax reform program (CTRP).

“This administration is committed to long-term fiscal sustainability. Be assured we will continue to exercise fiscal responsibility and maintain sound fiscal policies to support higher and more inclusive growth,” Dominguez said.

“Fiscal strategy remains to be prudent, sustainable, and supportive of the government’s development objectives,” he added.

To generate additional revenue streams, Dominguez urged Congress to immediately heed to President Rodrigo R. Duterte’s call for the passage of the rest of the packages under the DOF’s CTRP.

Following the enactment of TRAIN, Dominguez said the DOF submitted the rest of the Duterte administration’s tax reform packages to the Congress and is hoping that lawmakers would approve them this year.

“The tax reform will bring about growth with equity and heightened productivity that will help us attain our aspiration to be a high-middle-income country by 2022, lifting one million Filipinos from poverty each year,” Dominguez said.

In 2019, the government aims to raise 13.2 trillion in revenues, equivalent to 16.5 percent of gross domestic product (GDP) and an improvement from the 15.6 percent attained in 2017 as well as this year’s target of 16.2 percent.