The document discusses the Tax Reform for Acceleration and Inclusion (TRAIN) Law in the Philippines. It aims to make the tax system more progressive by lowering personal income taxes for most while increasing taxes on luxury goods like sugar-sweetened beverages. An interview with a student reveals that the law has increased prices for meals and drinks, affecting his budget. While fuel prices rising could also increase transportation costs, the long term goals of the law are to benefit more citizens and fund infrastructure and social services.
The document discusses the Tax Reform for Acceleration and Inclusion (TRAIN) Law in the Philippines. It aims to make the tax system more progressive by lowering personal income taxes for most while increasing taxes on luxury goods like sugar-sweetened beverages. An interview with a student reveals that the law has increased prices for meals and drinks, affecting his budget. While fuel prices rising could also increase transportation costs, the long term goals of the law are to benefit more citizens and fund infrastructure and social services.
The document discusses the Tax Reform for Acceleration and Inclusion (TRAIN) Law in the Philippines. It aims to make the tax system more progressive by lowering personal income taxes for most while increasing taxes on luxury goods like sugar-sweetened beverages. An interview with a student reveals that the law has increased prices for meals and drinks, affecting his budget. While fuel prices rising could also increase transportation costs, the long term goals of the law are to benefit more citizens and fund infrastructure and social services.
The document discusses the Tax Reform for Acceleration and Inclusion (TRAIN) Law in the Philippines. It aims to make the tax system more progressive by lowering personal income taxes for most while increasing taxes on luxury goods like sugar-sweetened beverages. An interview with a student reveals that the law has increased prices for meals and drinks, affecting his budget. While fuel prices rising could also increase transportation costs, the long term goals of the law are to benefit more citizens and fund infrastructure and social services.
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Sephora Sequino BS Psych 4 February 27, 2018
RA No. 10963: Tax Reform for Acceleration and Inclusion (TRAIN Law) Source: www.dof.gov.ph
TRAIN or the Tax Reform for Acceleration and Inclusion is the first package of the comprehensive tax reform program (CTRP) envisioned by President Rodrigo Duterte’s administration. The goal of TRAIN is to create a more just, simple, and more effective system of tax collection, as per the constitution, where the rich will have a bigger contribution and the poor will benefit more from the government’s programs and services. Through TRAIN, every Filipino contributes in funding more infrastructure and social services to eradicate extreme poverty and reduce inequality towards prosperity for all. TRAIN addresses several weaknesses of the current tax system by lowering and simplifying personal income taxes, simplifying estate and donor’s taxes, expanding the value-added tax (VAT) base, adjusting oil and automobile excise taxes, and introducing excise tax on sugar-sweetened beverages. TRAIN lowers personal income tax (PIT) for all taxpayers except the richest. Under TRAIN, those with annual taxable income below P250,000 are exempt from paying PIT, while the rest of taxpayers, except the richest, will see lower tax rates ranging from 15% to 30% by 2023. To maintain progressivity, the top individual taxpayers whose annual taxable income exceeds P8 million, face a higher tax rate from the current 32% to 35%. Husbands and wives who are both working can benefit from a total of up to P500,000 in exemptions. In addition, the first P90,000 of the 13th month pay, and other bonuses will be exempt from income tax. Overall, the effective tax rates will be lowered for 99% of tax payers. Currently, a person who has a taxable income of P500,000 annually is taxed at 32% at the margin. TRAIN will bring this down to 25% in 2018 and will be further brought down 20% after five years. Minimum wage earners will continue to be exempted from income taxes as their income falls below P250,000. In addition, the new tax structure will address the current problem wherein going a peso above the minimum wage will result in a lower effective take home pay, thereby discouraging minimum wage earners to accept incremental wage increases and keeping them in an artificial minimum wage trap. The simplified tax system will increase the take home pay of most individuals and encourage compliance. Self-employed and professionals (SEPs) with gross sales below the VAT threshold now have the option to pay a simpler 8% flat tax in lieu of income and percentage tax, while those above the VAT threshold will follow the PIT schedule.
INTERVIEW
Interviewee;s Info:
Name: Harley M. Sequino
Gender: Male
Occupation: Student
Address: Mabolo, Cebu City
1. Do you know about TRAIN Law?
YES 2. Do you think it will affect us or you as a student? How? Yes. As a student, I have a budget for my daily spending which includes my meal and transportation. TRAIN law has significantly affected me because excise taxes have already been imposed in our city as meals and drinks went up for as much as five pesos more than the regular prices. Because of this, I preferred to bring my own food and drinks with me to reduce my daily spending. Although jeepney fares have not increased yet, I am also worried as prices of gasoline have already increased which will eventually lead to the increase of fares. If that happens, then I might need to reduce my spending even more. REACTION:
Based on the interview with Harley Sequino (3rd year college student), his foremost concerns in the aftermath of the law’s implementation is centered on the food and transportation sector the most. He mentioned that there had been sudden surge of prices of sweetened beverages and fuel prices. As a consumer myself, I agree with Harley’s answer as I have personally experienced the same situation as his. Prices of meals and drinks have greatly increased everywhere may it be in the university’s canteen or stores and stalls outside university; thereby leading me to avoid buying them. However, having an idea about the TRAIN law gave me a positive outlook on this issue. Based on the effects it had on me and Harley, I can conclude that higher pricing is enough to discourage consumers from purchasing “sin products” to improve healthcare. For me, the imposition of higher pricing is a start towards the right direction, but the government must be able to emphasize working towards better health services and programs for people to be healthier citizens. In the transportation sector, I also agree with Harley’s view since I am also worried about the implication on the fares of fuel- reliant public transportation methods like jeepneys and buses knowing that there is an increase in the price of gasoline. I assume that if the price of gasoline goes up, the drivers of public transportation vehicles will be forced to increase their fare to compensate for the increase in the price of gasoline.
Nevertheless, I believe that the newly imposed bill has its pros and cons. The important thing is that it precludes everyone to have equal benefits regardless of what state of living they currently belong to. Although there may be some citizens who remain wary of the changes this law has brought about despite the current administration’s noble intentions in mind with its implementation, it is very important to keep in mind that the secret to a successful society is in the people following the rule of law. Given that this law has been in effect for a month now, the simplest thing us Filipinos can do as a citizen is to start reallocating and re-evaluating our spending. It won’t be long until the TRAIN law affects all of us. Like all changes, we must prepare for the worst and hope for the best.
