The first package of reforms brought by the TRAIN Law has successfully boosted the spending power of the Filipino consumers.
Finance Secretary Carlos Dominguez made the statement after several companies in the country has reported growth in sales and high-profit margin.
Speaking before the Philippine Economic Briefing in Osaka, Japan, Dominguez explained that 99 percent of individual taxpayers in the Philippines enjoy reductions in their income tax rates. He further said that Filipinos earning below $4,500, or P233,000, annually are exempted from paying personal income taxes. On the other hand, workers above that range receive about one-month extra take-home pays each year from the deductions in their tax rates.
To emphasize his point, Dominguez added that the government has handed out a 14th-month pay, annually, to average wage earners by correcting their tax rates.
Additional income for the workers
The Tax Reform for Acceleration and Inclusion (TRAIN) Law implemented at the start of 2018 has raised taxes on several products such as petroleum and car sales to give way for lower personal income tax rates.
The Department of Finance estimates 99 percent of the country’s workers enjoy P103 billion worth of extra income for the first three quarters of 2018, as a result of the implantation of the Train Law.
Since then, top firms in the Philippines such as Jollibee Foods Corp., Ayala Land, Inc., SM Prime Holdings, BDO Unibank, Inc. and Metropolitan Bank and Trust Co., and other retail giants, real estate firms, and banks reported double-digit growth.
Dominguez said that the significant growth in sales and income of the corporate giants in the country indicates that Filipinos now have higher spending power, a benefit given by the TRAIN Law.
DOF also reported a P41.9 billion worth of government revenues from tax measures under the TRAIN Law for the first nine months of 2018. However, it is a 5.4 percent short of the P44.3 billion target for the said period.