BIR income tax take expected to decline in 2018 due to TRAIN Law
BIR Commissioner Caesar Dulay (INQUIRER FILE PHOTO / GEORGE SISON)
In light of the lower personal income tax rates that took effect this year under the Tax Reform for Acceleration and Inclusion (TRAIN) Act, the Bureau of Internal Revenue (BIR) expects collections from net income and profits to decline in 2018.
A Revenue Memorandum Order No. 8-2018 issued by Internal Revenue Commissioner Caesar R. Dulay on Jan. 23, which contained the BIR’s 2018 collection goal allocation, nonetheless programmed higher tax takes from value-added tax as well as excise taxes this year after the TRAIN Law cut on VAT exemptions while raising the excise tax rates slapped on oil, cigarettes, sugary drinks and vehicles.
Dulay said the TRAIN is expected to contribute an additional P15.893 billion in tax revenues to the BIR this year.
The country’s biggest tax collection agency is tasked to collect P1.007 trillion in taxes on net income and profits this year, down from last year’s target of P1.057 trillion.
The TRAIN Law raised the tax-exempt cap to an annual income of P250,000.
Taxes collected from personal and corporate income earners will nonetheless account for more than half of the BIR’s P2.039-trillion total collection goal for 2018.
Collections from VAT are expected to rise to P456.967 billion this year from the programmed P364.431 billion in 2017.
The tax from excise taxes, meanwhile, were programmed to jump to P310.208 billion from 2017’s target of P185.029 billion.
Earlier Department of Finance data showed that the government targets excise tax collections from cigarettes this year to reach P126.9 billion, on top of collecting P56.2 billion from alcohol products.
Under the TRAIN or Republic Act No. 10963, the unitary excise tax slapped on cigarettes rose to P32.50 per pack effective Jan. 1 from P30 a pack last year.
The TRAIN mandated a further increase in the cigarette excise tax rates to P35 per pack from July 1, 2018 to Dec. 31, 2019; P37.50 a pack from Jan. 1, 2020 to Dec. 31, 2021; and P40 from Jan. 1, 2022 to Dec. 31, 2023.
From Jan. 1, 2024 onwards, the specific tax rate on tobacco products will be increased by 4 percent yearly, under the TRAIN Law.
The BIR is also tasked to collect P88.536 billion in percentage taxes, and P129.019 billion in other taxes.
From non-BIR operations, another P38.342 billion would be collected from taxes on net income and profits, on top of P8.932 billion in other taxes.
Last year, the BIR’s tax take jumped 13 percent to P1.779 trillion but missed its P1.829-trillion target. /jpv
