Tax reform to generate P181 B in 2019
The government is expected to generate P181.4 billion in revenue next year from the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law and other tax reform measures, according to the Department of Finance (DOF).
During a House appropriations committee hearing yesterday, Finance Secretary Carlos Dominguez said the TRAIN, as well as the proposed tax amnesty program and adjustments in the Motor Vehicle Users Charge – which are now pending in Congress – are projected to raise P181.4 billion in revenue in 2019.
This, he said, would help the government meet its target revenue for next year which was set at P3.21 trillion by the Development Budget Coordination Committee (DBCC).
“In 2019, the national government aims to raise total revenues of P3.2 trillion. This includes the revenue of P181.4 billion to be generated from TRAIN and the proposed tax reform package 1B,” Dominguez told lawmakers.
According to the finance chief, next year’s programmed revenues are equivalent to 16.5 percent of the country’s gross domestic products (GDP), an improvement from the 15.6 percent recorded in 2017 and the 16.2 percent target this year.
This was also 12.7 percent higher than the 2018 target of P2.85 trillion.
In particular, the Bureau of Internal Revenue (BIR) is projected to improve its collections by 13.1 percent, while the BOC is expected to post a collection growth of 11.3 percent.
In January, the government rolled out the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which sought to lower personal income taxes, while adjusting excise taxes on oil, automobiles, tobacco, coal and sugar sweetened beverages. It also expanded the value-added tax base by removing some exemptions.
Complementing this is the Package 1B of the CTRP, which covers the proposed tax amnesty program and adjustments in the MVUC.
In the first six months, Dominguez said TRAIN generated P33.7 billion in revenue since its implementation, P3.6 billion higher than the target.
The finance chief said this contributed to the total revenue collection during the period, which reached P1.41 trillion, 20 percent up from the P1.8 trillion recorded in the same period in 2017.
The BIR, for its part, achieved a 14 percent increase in collection, while the BOC grew its collections by 33 percent.
Meanwhile, Dominguez told lawmakers the DOF is hoping to approve other tax reform packages this year.
These include Package 2 of the CTRP, which pushes to lower corporate income tax rates while rationalizing the fiscal incentives system, and Package 2 Plus, which proposes for increases in alcohol, tobacco, mining and casino taxes.
The DOF also submitted Package 3, which will focus on the valuation of real estate property, together with Package 4, which will seek to rationalize taxes on financial products and investments.