The Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC) posted double-digit increase in revenue collections in the first two months of 2018 as a result of the Tax Reform for Acceleration and Inclusion (TRAIN) law.
Finance Secretary Carlos Dominguez III, in his speech during the Inter-Pacific Bar Association forum in Taguig City Wednesday, said TRAIN has eased collection of revenues.
He said collections by the BIR rose 10.8 percent year-on-year as of end-February this year to PHP280.6 billion from year-ago’s PHP253.3 billion.
Collections by the BOC went up 26.5 percent from PHP66.8 billion to PHP85.63 billion, he said.
The first package of TRAIN cut workers’ income tax rates but hiked excise tax on fuel and introduced excise tax on sugar-sweetened beverages, among others, to address the impact of personal income tax rate cut on state revenues.
“Consequently, we are confident the aggressive infrastructure build-up we initiated will be adequately funded,” Dominguez said.
The tax reform has been proposed in a bid to fund the Duterte administration’s massive infrastructure program called “Build, Build, Build”, which is targeted to spend at least PHP8 trillion until 2022.
About 30 percent of the revenues to be generated by TRAIN will be allocated for social protection programs while 70 percent will be used for the infrastructure program.
Roads, bridges and other projects under this program will be built in rural areas, primarily in Mindanao, to ensure that growth of the domestic economy is inclusive and benefit even the poor.
Dominguez said reforms put in place since a few years back are expected to sustain the domestic economy’s growth to around seven percent this year and ensure that it remains among the fastest-growing economies in Asia.
“Last year, we ranked among Asia’s fastest-growing economies alongside China, India, and Vietnam. This year, we expect to grow our economy by seven percent or better on the back of profound policy reforms and an aggressive infrastructure program that will promote economic inclusion and competitiveness,” he said.
The Finance chief said the debt crisis in the past, along with fiscal discipline, has resulted in underinvestment on infrastructure but since the environment has changed and fiscal health is better, the government bids to invest more in infrastructure to boost domestic growth.
Investment on human capital, through improvement of the education and health systems, are also among the plans of the government, citing the positive demographics in the country, with most of the population aged 24 years old and below.