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TRAIN law revenues exceed target by 8.1% in 2018 — DOF

Revenue generated from the Tax Reform for Acceleration and Inclusion (TRAIN) law exceeded target in 2018 - the first full-year of implementation of the measure.

In a statement on Thursday, the Department of Finance (DOF) said TRAIN revenues stood at P68.4 billion, 8.1%  or P5.1 billion higher than the P63.3 billion target for last year.

Citing its Strategy, Economics, and Results Group (SERG) report, the DOF said the largest gains were seen in tobacco excise, auto excise, and documentary stamp tax collections.

"Taken together, these highest gainers contributed around P51.5 billion of the 68.4 billion of additional revenue from TRAIN," it said.

The TRAIN law, which took in effect in 2018, reduced personal income taxes but at the same time increased excise taxes on sugar-sweetened beverages, petroleum products, and automobiles to offset for the potential revenue losses.

The Finance Department, meanwhile, said that taxpayers have reaped a "cash bonanza" of P111.7 billion in personal income tax (PIT) cuts in 2018.

Despite the PIT cuts, collections were higher than expected due to better compliance and an increase in the number of registered taxpayers, according to the DOF.

Auto excise tax revenue was above target by P6.2 billion, owing in part to higher purchasing power for vehicles.

Documentary stamp tax revenue was also above target by P4.7 billion, because of higher transactions value and better collection efficiency.

Accounting for VAT from additional spending, estimated at P24.6 billion, which was due to additional take-home pay as a result of lower personal income taxes, TRAIN revenue has far exceeded its target, providing additional public resources for infrastructure and human capital development programs, the DOF said.

The DOF previously estimated that the implementation of TRAIN gave a combined P12 billion per month in additional income to the country’s individual taxpayers, most of them compensation earners, and in unconditional cash transfers to the poorest households and senior pensioners.

With TRAIN, taxpayers with a net taxable income of P250,000 and below are exempted from paying personal income taxes. Those earning less than P8 million annually also get PIT cuts under TRAIN. — RSJ, GMA News