Even as the government slashed personal income tax rates, revenue collections are expected to breach the P4-trillion mark by 2022 with the help of new or higher taxes imposed on consumption under the Tax Reform for Acceleration and Inclusion (Train) Act.
Department of Finance (DOF) data showed that incorporating the Train as well as President Rodrigo Duterte’s veto message in the new tax measure will bring total tax and non-tax revenues this year to P2.806 trillion, equivalent to 16 percent of gross domestic product (GDP).
The government expects tax revenues in 2018 to reach P2.637 trillion or 15 percent of GDP, of which the Bureau of Internal Revenue (BIR) will collect P2.039 trillion, while the Bureau of Customs’ (BOC) take of import duties and other taxes was projected to amount P581.3 billion.
In 2019, combined tax and non-tax revenues are seen further rising to P3.16 trillion, with the BIR and the BOC’s target collections increasing to P2.309 trillion and P662.2 billion, respectively.
Total revenues are expected to hit P3.553 trillion in 2020 and P3.957 trillion in 2021.
The BIR was tasked to collect P2.617 trillion in 2020 and P2.942 trillion in 2021. The BOC, meanwhile, must collect P748.2 billion in 2020 and P826.2 billion in 2021.
By 2022, total revenues are supposed to reach P4.415 trillion or 17.1 percent of GDP.
Tax revenues in 2022 are projected to hit P4.248 trillion, with P3.312 trillion to be collected by the BIR, and P914.8 billion from the BOC’s collections.
Last December 19, President Duterte signed into law package 1A of the Train under Republic Act No. 10963, which, starting January 1 this year, slashed and restructured personal income tax rates that stayed the same for two decades, while also jacking up or slapping new taxes on consumption of oil, cigarettes, sugary drinks, and vehicles.
Taking into account the five items vetoed by Mr. Duterte from RA 10963, package 1A is expected to raise P89.9 billion in net revenues this 2018 —P63.3 billion from tax policy measures on top of P26.6 billion from legislated tax administration measures.
This year, the government stands to lose P146.6 billion in foregone revenues from the lower personal income tax rates as well as donors’ and estate taxes, but which will be offset by higher taxes on various goods to be shouldered by consumers.
Part of the additional revenues to be generated by the Train law will fund the ambitious “Build, Build, Build” program aimed at ushering in “the golden age of infrastructure” in the country. /kga