TRAIN misses first 9-month revenue target
The Duterte administration’s first tax reform law missed its net revenue target in the first nine months last year, but Department of Finance (DOF) was quick to explain that the new measure has directly benefited Filipinos through additional spending power.
Verified DOF data distributed to reporters last Friday showed that the tax reform for acceleration and inclusion (TRAIN) law generated a net revenue of 141.9 billion in January to September last year, below by 5.4 percent against the 144.3-billion target for the period.
Based on the DOF report, the sweetened beverage excise and the valueadded tax (VAT) rationalization dragged down TRAIN revenues at end-September, while the additional sin taxes along with the new documentary stamp tax rates recorded above target collections.
Finance Secretary Carlos G. Dominguez III, however, emphasized that the “big number” in the TRAIN performance report is the reduction in personal income tax, which directed benefited individuals who are earning less or more than 1250,000 annually.
According to the DOF, revenues from TRAIN VAT, which raised the exemption threshold from 11.9 million to 13 million, amounted to only 13.6 billion the first three-quarters, significantly lower compared with the 124.8-billion goal.
The DOF said the Bureau of Internal Revenue (BIR) saw a surge in input VAT claims last year, and only three industries have actually reported “VATable” importations during the period, which weakened the revenue collection from the consumption levy.
The DOF-revenue operations group is now investigating the reasons behind the low VAT collection performance.
The DOF likewise reported that sugar-sweetened beverages (SSBs) excise raised only 131.2 billion at endSeptember, below the expected 143.3 billion after sugary drink manufacturers opted for non-high fructose corn syrup to avoid paying higher levies.
Other TRAIN measures that missed their targets were financial taxes with 12.4 billion instead of 15.2 billion, and other excise taxes with 12.3 billion, lower than the 13.1-billion target.
There were also higher-than-expected losses from the rationalized estate tax and donor