Train revenues below target as of end-Sept – Dominguez
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Sun, 13 Jan 2019 16:38:43 +0000
The government is optimistic that revenues from tax reforms implemented last year will hit the 2018 target despite lower-than-expected results as of end-September.
“For the entire Train law, we collected P41.9 billion for the first three quarters,” Finance Secretary Carlos Dominguez 3rd said told reporters late on Friday.
Train, or the Tax Reform for Acceleration and Inclusion Act, provided income tax exemptions for those earning P250,000 and below and sought to make up for the revenue loss by imposing new taxes on fuel and sugar-sweetened beverages, among others.
January-September Train revenues fell 5.4 percent short of the P44.3-billion target but Dominguez insisted that the 94.7-percent collection rate was “not so bad”.
Department of Finance (DoF) data showed the biggest shortfalls involved the excise tax on sugar-sweetened beverages and value-added tax (VAT). At P31.2 billion, the former was 27.9 percent below of the P43.3-billion target for the nine-month period.
“Sweetened beverage excise is short by P12.1 billion as the industry claims that no high fructose corn syrup (HFCS) has been used since January 1, 2018,” the DoF said.
Train imposed a P6 per liter tax on beverages using caloric and non-caloric sweeteners and P12 per liter on those using HFCS. Milk and three-in-one coffee mixes were exempted.
Meanwhile, VAT collections of P3.6 billion missed the nine-month target of P24.8 billion by 85.4 percent.
“VAT is short by P12.2 billion. The main reason by the revenue agencies is that there are only three industries (power transmission, jewelries, and the central bank) that reported importation, which is now VATable,” the DoF reported.
On a positive note, Dominguez said that losses from lower personal income taxes totaled P102.9 billion, lower than the projected P108.7 billion.
“That is close to P12 billion a month. That means to say that individuals had actually additional P12 billion a month [in aggregate] spending power,” he said.
“So don’t look only at the collection. Look at what was also given out directly to individuals. This Train law benefitted directly individuals who were earning P250,000 and below. Train has succeeded 100 percent in that regard,” the Finance chief claimed.
The biggest gains were seen in tobacco excise tax and documentary stamp tax collections.
The DoF said “better compliance and advance production” allowed excise tax collections from tobacco to reach P5.9 billion, 78.7 percent higher than the P3.3-billion target.
Higher transaction values and better collection efficiency, meanwhile, allowed documentary stamp tax collections to hit P49.1 billion, more than double the P21-billion target.
The Finance department said it expected full-year Train revenues to hit the target of P63.3 billion “given overall good performance of the revenue agencies based on emerging full-year collection data.”
The department previously targeted full-year Train revenues of P89.9 billion but to slashed this due to delays in implementing fuel marking and electronic invoicing provisions.
The post Train revenues below target as of end-Sept – Dominguez appeared first on The Manila Times Online.