Collections under first tax reform ‘pretty good’ so far — DoF chief - EcoFinBiz Blog

Blue Host

Collections under first tax reform ‘pretty good’ so far — DoF chief

tax filing
BW FILE PHOTO

THE TAX REFORM for Acceleration and Inclusion (TRAIN) law’s collection performance has been “pretty good” so far, the Department of Finance (DoF) said, citing data in last year’s first three quarters.

Data distributed to reporters showed the TRAIN law, or Republic Act No. 10963, yielded P41.9-billion net revenues in the nine months to September, equivalent to 94.7% of the P44.3-billion program for that period. It is also equivalent to 70% of the downward-adjusted P63.3-billion target for the whole of 2018.

“In collections, we succeeded for the first nine months at 94.7%. In any grading, it’s not so bad. It should’ve been a hundred or over a hundred, it’s not so bad. It’s pretty good,” Finance Secretary Carlos G. Dominguez III told reporters late Friday at the DoF headquarters in Manila.

Mr. Dominguez noted that the same months saw P102.9 billion in foregone revenues due to lower personal income tax rates under the law. The actual foregone revenues were smaller than the initial projection of P108.7 billion.

TRAIN’s revenue contributors were led by tobacco excise and documentary stamp taxes (DST) which topped their targets by P2.6 billion and P28.1 billion, respectively. TRAIN generated an additional P5.9-billion revenues from tobacco products due to “better compliance and advance production,” and P49.1 billion from DST attributed to “higher transactions value and better collection efficiency,” according to Mr. Dominguez.

Collections of higher fuel excise taxes totaled P43.4 billion against a P43.3-billion target, while higher tax rates on cars generated P12.2 billion against a P11.6-billion goal.

At the same time, TRAIN raised P31.2 billion from the new tax on sugar-sweetened drinks, 72.1% of a P43.3-billion target, and collected P3.6 billion in value added tax after smaller exemptions, just 14.4% of a P24.8-billion goal.

The DoF is currently auditing beverage manufacturers to check whether they have been paying the correct taxes.

As for VAT, Finance Undersecretary Karl Kendrick T. Chua said that some businesses may have stopped importing while the surge in capital goods imports has also increased input VAT claims which temporarily lowers VAT revenues until output VAT is reported. “Because of the repeal removing VAT exemption of importation… maybe they avoid the VAT by not importing,” Mr. Chua said in the same chat with reporters. “The second, we are looking at so much capital equipment importation — it’s a minus. It may suggest that in the coming years VAT will increase as you build your infrastructure and use your machines to produce more products. That may be a sign that were just delaying the collections because we’re investing now.”

But he said that bigger disposable incomes from lower personal income tax rates should indirectly lead to higher VAT collections.

Other TRAIN excise taxes on coal, minerals, and cosmetic procedures generated P2.3 billion, equivalent to 75.5% of a P3.1-billion goal; while higher financial taxes raised P2.4 billion, 45.6% of the P5.2 billion target.

Lower estate and donors tax also led to forgone revenue of P3.7 billion and P2.3 billion, respectively, which was more than the P1.7 billion and P1.3 billion programmed shortfalls, respectively.

The DoF is also optimistic to hit TRAIN’s 2019 collection target. “The economy is doing pretty good. We expect that to reflect in better collections as collection agencies are doing better,” Mr. Dominguez said. — Elijah Joseph C. Tubayan

No comments


Theme images by merrymoonmary. Powered by Blogger.