The effective implementation of the Tax Reform for Acceleration and Inclusion law allowed the government to exceed the revenue target by P58.2 billion in the first four months, Finance Secretary Carlos Dominguez III said over the weekend.
Dominguez said in a statement the higher revenue enabled the government to sustain its aggressive spending policy without breaching the programmed budget deficit.
He said the government did not underspend in the four-month period, and it also dramatically exceeded revenue collections, leading to a budget deficit that was lower than the programmed level.
The Bureau of the Treasury said the national government registered a P105.9-billion deficit in January to April, on the back of strong revenue collections despite the surge in government spending. The actual deficit was lower by P61.2 billion from the P167.1-billion programmed deficit during the period.
“The reason we didn’t exceed our target deficit is because we exceeded our total revenues by P58.2 billion as of the first four months of 2018. Tax revenues from January to April was impressively higher than last year’s collections for the same period,” Dominguez said.
Data showed tax revenues hit P927.4 billion in the first four months, or P58.2 billion higher than the target of P869.2 billion.
The Bureau of Internal Revenue collected P232.6 billion in April, up 24 percent from a year ago. Four-month collection by the BIR also increased 17 percent to P655.7 billion.
“Higher excise tax take due to the implementation of the Train law as well as improved and correct valuation and tariff classification drove the robust growth,” the Treasury said.
Customs collections surged 50 percent in April to P46.8 billion and 31 percent in the first four months to P176.6 billion.
Government spending reached P1.033 trillion in the first four months, just P3 billion below the programmed spending of P1.036 trillion mostly because the government saved P3.4 billion in interest payments, Dominguez said.
“We didn’t hit our deficit target not because we underspent, but because of revenues. Total spending is lower by P3 billion mainly because of the P3.4 billion interest savings. Clearly, there is no underspending as actual non-interest expenditure is higher than the program by P400 million,” Dominguez said.