The tax and customs bureaus grew their collections in the first two months of the year, Finance Secretary Carlos Dominguez 3rd said on Wednesday, attributing the gains to the newly implemented Tax Reform for Acceleration and Inclusion (Train) law.
“In the first two months of this year since the Train was passed, we are actually collecting more revenues than expected,” Dominguez said in a speech.
He said the Bureau of Internal Revenue (BIR) netted P280.60 billion during the January to February period, up 10.8 percent from a year earlier, while the Bureau of Customs collected P85.63 billion, 26.5 percent higher.
The BIR was able to collect P1.772 trillion in 2017, up an annual 13 percent but short of the P1.829-trillion target. The BoC collected P458.2 billion, narrowly missing its P459.6-billion goal.
The Train law, comprising the first package of the government’s Comprehensive Tax Reform Program (CTRP), reduced personal income tax rates in exchange for higher excise taxes on fuel, cars and sugar-sweetened beverages, among others.
The government has said that revenues from the tax reform program would fund its ambitious ‘Build Build Build’ infrastructure program.
“We expect to pass the rest of the tax reform measures. We expect the same outcome as the first tranche of policy reforms,” Dominguez said.
“This includes a progressive reduction in the corporate income tax rate to match regional benchmarks,” he said, referring to the Package 2 that also seeks to rationalize tax incentives.
A simpler and fairer taxation system, Dominguez claimed, will yield better revenues.
“In the end, only incentives that are performance-based, targeted, time-bound, and transparent will remain. It makes it easier for government to make wise economic investments without compromising fiscal discipline,” he said.