TRAIN law exceeds revenue target
The government registered a net revenue gain in the implementation of the Duterte administration’s first tax reform law in the first three months of the year owing to higher taxes remitted by the tobacco industry.
Instead of a net loss of at least R3.2 billion in January to March, the Bureau of Internal Revenue (BIR) reported to the House ways and means committee that the government generated R12.5 billion in additional revenues from the tax reform for acceleration and inclusion act (TRAIN).
Based on the BIR data, the main driver of the above program revenue collection from TRAIN was the excise tax on cigarette products.
The government only programmed R686.1-million tax revenues from cigarettes, but the BIR collected R14.97 billion from January to March this year.
BIR Assistant Commissioner Alfredo V. Misajon explained the higher than expected revenues from cigarettes is attributable to the stable consumption of tobacco products despite the several increases in excise tax rates.
“We noticed that although we increased the rates on the excise tax of tobacco, we’ve seen that the consumption of tobacco had not been tapering off because maybe it’s just the initial months of the implementation,” Misajon said.
The BIR official also said that some cigarette manufacturers had not raised their retail prices despite the increase in excise levies.
Aside from tobacco, the BIR also surpassed its R409.4-million collection target on stocks transaction of traded stocks by 175 percent to R1.12 billion, while on capital gains of non-trade stocks by 29 percent to R1 billion against the target of R777 million.
Revenues from documentary stamp tax, likewise, exceeded the goal of R7.6 billion by 23 percent to R8.72 billion, while foreign current deposit unit raised R159.71 million, surpassing the R99.72million goal by 60 percent.
Excise tax on coal also breached the target of R166.62 million, generating a total of R305.8 million at end-March, while donors tax amounted to R61.06 million, a reversal of the expected R376.19 million in revenue loss.
The government also missed its expected foregone revenues from the reduction in personal income tax (PIT) rate and estate tax.
In the first-quarter, the government’s forgone revenues from PIT amounted only to R23.34 billion, below the R36.04 billion program, while estate tax losses reached R225.23 million, lower than the R361.72-billion ceiling.
Losses from the rationalization of value-added tax (VAT) exceptions were also below the R4.2-billion program at R3 billion.
Meanwhile, revenues from higher excise on petroleum were short of the R9.98billion target, generating only R4.73 billion in the first-quarter, while collection from automobiles was below the R673.66-million target at R363.71 million.
Revenues from sugar sweetened beverages also fell short of the R7.7-billion target in the first-quarter at R7.78 billion, tax on coal reached R305,770, well below the target of R686.01 million.
Cosmetic tax also registered a hefty below target revenues at R7,380.