(Source: Business Mirror | August 22, 2018)
The Department of Finance (DOF) on Wednesday asserted that the robust retail sales in malls, fast-food restaurants and other dining places can be traced to ordinary Filipinos having more money to spend, coming from the personal income-tax (PIT) cuts under the Tax Reform for Acceleration and Inclusion (TRAIN) law, which was implemented in January this year.
DOF Assistant Secretary Antonio Joselito G. Lambino II said that retail giants and fast-food chains like Robinsons Retail Holdings Inc., Philippine Seven Corp. and Puregold Price Club (Pgold), among others, have all reported more robust sales since this year’s implementation of the TRAIN, which had slashed PIT rates, benefiting 99 percent of all taxpayers.
“The significant growth in sales reported by retail establishments and restaurants point to the fact that people now have more money to spend as a result of the hefty PIT cuts under TRAIN, which is now benefiting 99 percent of our taxpayers,” Lambino said.
According to DOF estimates, the implementation of TRAIN gave a combined P12 billion in additional income to the country’s individual taxpayers, most of them compensation earners. Under the TRAIN, taxpayers with a net taxable income of P250,000 and below are exempted from paying the PIT, with those earning less than P8 million annually also getting PIT cuts.
Lambino explained that Robinsons Retail Holdings Inc. posted a 9.6-percent growth in its profits during the second quarter, with its net sales rising by 13.5 percent to P31.5 billion. The company, in its disclosure to the Philippine Stock Exchange (PSE), attributed the increased take-home pay of consumers under the TRAIN as among the major factors contributing to its profit growth in the April-to-June period.
Philippine Seven Corp., which licenses the 7-Eleven convenience stores, likewise, posted higher net income of P342 million, up by 18.9 percent from P288 million posted during the same period a year ago. Its second-quarter revenues rose to 19.2 percent to P11.55 billion, from last year’s P9.69 billion, Lambino pointed out.
He said the 7-Eleven operator also pointed to the TRAIN’s benefits of lower personal-income taxes, which, in turn, led to additional income for taxpayers, as the reason behind the increase in sales of all its stores despite the price hikes.
In a news statement, Pgold said its net income grew by 25.6 percent in the first half of 2018 to P3.08 billion. Its consolidated net sales increased 13.2 percent to P64.03 billion. The company earlier was pointed to have claimed it benefited from higher consumer spending due to increased levels of take-home pay after the implementation of the TRAIN.
President Duterte signed into law on December 2017 the first package of the Comprehensive Tax Reform Program (CTRP), otherwise known as the TRAIN. The measure, which took effect this year, slashed PIT rates while implementing offsetting measures, such as increasing excise taxes on fuel and tobacco products, among others.
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