THE government is looking at additional revenues of approximately P7 billion in 2018 from a projected P82.3 billion to P90 billion as a result of the vetoed provisions under the first package of the Comprehensive Tax Reform Program.
The Tax Reform Acceleration and Inclusion, which lowers personal income tax rates while raising excise taxes on numerous products, is projected to contribute a net amount of P82.3 billion in fiscal year 2018.
Economic managers, however, said the amount could go higher given the provisions vetoed by President Rodrigo Duterte.
“Estimated revenues could go up to P90 billion,” Finance Secretary Carlos Dominguez III said after the inter-agency Development Budget Coordination Committee meeting at the Department of Finance on Friday. Dominguez and Budget Secretary Benjamin Diokno declined to mention the provisions vetoed by President Duterte under the TRAIN law.
A source later said the vetoed provisions include exemption of various petroleum products from the excise tax, earmarking of incremental tobacco taxes and the exemption of gross sales or receipts not exceeding P500,000 from the percentage tax.
President Duterte signed into law the TRAIN bill which is expected to generate P130 billion in revenues during its first year of implementation. Duterte signed Republic Act 10963 or the TRAIN law—a priority measure of the Duterte administration—at Malacañang’s Ceremonial Hall on Dec. 19.
Revenues from the tax reform measure aims to fund the Duterte government’s ambitious P8.44-trillion “Build, Build, Build” infrastructure and socio-economic programs.
The TRAIN, which provides for personal income tax exemptions for the first P250,000 of taxable income, along with other significant PIT cuts for other tax brackets, provides Filipino taxpayers with “much-needed relief” after 20 years of no adjustment on the rates, Dominguez said.
He said preliminary computations show that the government would be giving “almost P150 billion” back to the people in the form of tax relief under the TRAIN.
Seventy percent of the incremental revenues under the TRAIN will help support the government’s infrastructure modernization program, which will also include strengthening the country’s military and law enforcement capabilities, while 30 percent will go to social services to fund, among other anti-poverty measures, a targeted cash transfer program for the poorest 10 million households. Julito G. Rada