DoF: Train revenues above target in H1
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Mon, 14 Oct 2019 16:28:47 +0000
Government’s first-half 2019 revenue from the Tax Reform for Acceleration and Inclusion Act (Train) exceeded its target as most of its components posted better-than-expected results, the Department of Finance (DoF) said.
In a report, the Finance department noted that the earlier announced P55.6-billion Train tax take for the first six months of the year was P3.5 billion or 6.8-percent above-target.
To recall, Finance Secretary Carlos Dominguez 3rd earlier said that the amount in January to June this year was 65 percent higher than the figure posted in the same period last year.
Implemented at the start of 2018, Train exempts those earning annual taxable incomes of P250,000 and below from paying personal income taxes. In exchange, new taxes were imposed on automobiles, fuel and sugar-sweetened beverages, among others.
“The major gains are seen in the personal income tax, petroleum excise tax, sweetened beverage (SB) excise tax, tobacco excise tax, and the documentary stamp tax (P21.8 billion more in total),” the DoF, meanwhile, noted.
Broken down, losses from lower personal income taxes were originally projected at P64.5 billion, but actual losses were lower at P52.5 billion, or savings of P11.9 billion.
“This is due to better compliance, increase in registered taxpayers, and lower unemployment and underemployment rates,” the DoF said.
It added that higher-than-programmed volume of imports, and better compliance in anticipation of fuel marking program roll out resulted in the petroleum excise tax to exceed target by P3.4 billion to P54.4 billion.
Sweetened beverage excise tax exceeded government’s target by P1.5 billion to P24.9 billion on the back of “improved compliance as result of the issuance of a revenue regulation that provided clear guidelines on the coverage of the SB excise tax,” the DoF also reported.
This also resulted in the increase in the number of non-large taxpayers from 36 to 42, it added.
The Finance department also mentioned that better compliance amid the government’s continued crack down on illicit tobacco trade boosted tax take from tobacco excise to surpass target by P2.1 billion to P8.1 billion.
Lastly, documentary stamp tax surpassed the government’s target by P2.8 billion to P20 billion “given higher transaction value and better collection efficiency,” it added.
On the other hand, the DoF reported that major shortfalls are seen in the excise tax of automobiles and value-added (VAT) tax or P11.2 billion less in total.
Automobile excise tax collection was short by P7.7 billion to P1.2 billion “due to lower volume of imports,” it said, noting that January to May 2019 imports declined by 8.3 percent.
The Finance department added that VAT collection was short by P3.6 billion to P3.9 billion.
“The main reason cited by the BoC (Bureau of Customs) is that there are only six previously-exempted taxpayers (power transmission, jewelries, National Grid Corporation of the Philippines, Philippine Sports Commission, Armed Forces of the Philippines, and the Bangko Sentral ng Pilipinas) that reported importations, which are now VATable,” it said.
The shortfall in VAT was also seen in overall Bureau of Internal Revenue VAT revenues, which is lower than the target by P28.9 billion in the first semester of 2019, the DoF also pointed out.
“A major reason is the surge in input VAT, which reflects higher capital investment, given the infrastructure program,” it said.
In 2018, revenues attributable to Train amounted to P68.4 billion, exceeding its full-year target of P63.3 billion by 8.1 percent.
This year, the government is targeting to collect P153.8 billion from the tax measure.