By Chino S. Leyco, October 9, 2022; Manila Bulletin
Former President Duterte’s series of tax reforms garnered more than P100 billion in additional revenues to state coffers over a four-year period, data from the Bureau of Internal Revenue (BIR) showed.
In a report submitted by the BIR to the Senate, the bureau said that net revenues from the tax packages under the comprehensive tax reform program (CTRP) reached P107.7 billion from 2018 to end-July this year.
Based on the BIR report, the Duterte administration’s CTRP had brought in a total of P224.2 billion in additional revenues from 2018 to end-July, but at the same time, incurred P116.59 billion losses from the program
Broken down, the tax reform acceleration and inclusion law (TRAIN) added P100.2 billion to the BIR collection, while the sin tax reform laws that raised excise taxes on cigarettes, heated tobacco products, vapor products and alcoholic beverages put in P120.4 billion.
However, the subsequent corporate recovery and tax incentives for enterprises (CREATE) Act inflicted P112.9 billon in foregone revenues since its implementation in 2021.
In 2018, the BIR registered P9.9 billion net from TRAIN and P30.1 billion in 2019.
By 2020, the sin tax law under the CTRP Package 2 plus delivered P32.4 billion fresh revenues to BIR, but the gain was reduced by the P3.6 billion losses incurred from the TRAIN law.
Last year, the BIR reported that the bureau garnered P35 billion from TRAIN, and P54.9 billion from the sin tax law. But the agency also suffered P68 billion tax losses from the CREATE law.
From January to July, net revenue haul of the BIR from the CTRP reached P17 billion.
Of that amount, P28.8 billion came from TRAIN and sin tax law at P33.1 billion. However, the CREATE dragged down BIR’s tax collection by P44.9 billion from January to July 2022.
The CREATE law cut the income tax rate slapped on large corporations to 25 percent while slashing the levy on micro, small and medium enterprises (MSMEs) to 20 percent, retroactive to the middle of last year, from 30 percent previously, which had been the highest in ASEAN.
The Development Budget Coordination Committee had estimated the CREATE law will shed P118.8 billion from tax collections this year; P115 billion in 2023; and P106.5 billion in 2024.
Last July, Finance Secretary Benjamin E. Diokno has committed to pursue the passage of the remaining tax reform packages that were left behind by the Duterte administration involving real property valuation and financial taxation.