Growth fueled by tax reform

“WHERE ARE MY TAXES GOING?” is a question asked by many Filipinos. For one, your taxes are helping bring positive changes to the Philippine economy and the country as a whole. According to the Department of Finance (DOF), the first package of the Tax Reform for Acceleration and Inclusion (TRAIN) Law has carved sufficient fiscal space for the government to finance programs that support economic growth.

In its Economic Bulletin on GDP, the agency noted that Package 1 of the TRAIN Law will yield additional resources for the government to fund its Build Build Build Program and allocate more spending on social services.

Moreover, the DOF said that “these investments are game-changing” because they can lead to further investments that will drive growth, create meaningful employment, and in the long-run reduce poverty.

Government data indicated that gross domestic product (GDP) in the first three months of 2018 grew by 6.8 percent. Apart from household consumption, the DOF also saw an incline in government consumption in the first quarter of the year.

Up by 13.6 percent in Q1 2018, government consumption made a huge leap from Q1 2017’s growth of 0.1 percent. This even surpassed household consumption in the first three months of 2018, which increased by 5.6 percent compared to the same period last year.

There is also a notable improvement in tax revenues, which saw a 14.3 percent increase in the first quarter of the year. The TRAIN Law has created new sources of tax collection for the government such as excise taxes on sugar-sweetened beverages, automotive vehicles, and oil products. The additional tax collection is intended for the government’s infrastructure program.

The DOF said that “strong macroeconomic fundamentals such as strong external position and ample fiscal space” will sustain the momentum for high growth.

via Philippine News Agency / Kris Crismundo