The government’s tax take from the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the Tax Amnesty Act and the Sin Tax Reform laws in 2021 exceeded the cumulative target by 13.7 percent, according to the Department of Finance (DOF).
In a statement, the DOF said yesterday collections generated from these measures reached P228.6 billion last year.
In 2021, TRAIN contributed P171.1 billion in additional revenues, which is 8.3 percent above the target of P157.9 billion; the sin tax laws hauled in P52.9 billion, or 22.7 percent higher than the target of P43.1 billion; and the tax amnesty provided an additional P4.6 billion, said Valery Brion, officer-in-charge undersecretary of the DOF’s domestic finance group.
Over a four-year period from 2018 to 2021, TRAIN added P476.1 billion; the tax amnesty law, P14.6 billion; and the sin tax laws, P85 billion to the state coffers, for a total of P575.8 billion.
TRAIN provided 99 percent of taxpayers with significant tax savings resulting from lower personal income tax rates, while the Tax Amnesty Act allowed errant taxpayers to settle their outstanding tax liabilities.
The Sin Tax Reform laws imposed higher excise taxes on cigarettes, heated tobacco products, vapor products and alcoholic beverages.
Carlos Dominguez, DOF secretary, said the passage and implementation of these tax reform laws, along with the subsequent Corporate Recovery and Tax Incentives for Enterprises Act, make the comprehensive tax reform program almost 90percent complete.
Brion said the incremental revenues from these tax reform laws were earmarked to fund the Build, Build, Build program and the Universal Health Care program.
Earlier, the DOF’s Domestic Finance Group reported that despite the implementation of the CREATE Law, which reduced the corporate income tax (CIT) rate from 30 percent to 20 percent for micro, small and medium enterprises (MSMEs) and 25 percent for all other corporations, the CIT remains to be the highest source of BIR collections, which accounts for around 22 percent on average of total tax revenues.
The share of CIT revenues to the gross domestic product (GDP) could have reached 3.2 percent without the pandemic, Brion said.
Dominguez said that TRAIN and the other enacted CTRP tax reform packages enabled the Duterte presidency to raise infrastructure spending to above 5 percent of GDP, double the level recorded by the previous four administrations.
It also allowed increased spending on social services for human capital development and gave the Philippines the fiscal strength to weather the worse of the COVID-19 global crisis in light of the huge financial requirement of pandemic response, he said.
