REFLECTION

The Tax Reform for Acceleration and Inclusion (TRAIN) Act, officially cited
as Republic Act No. 10963, is the initial package of the Comprehensive Tax Reform Program
(CTRP) signed into law by President Rodrigo Duterte on December 19, 2017. The TRAIN Act is
the first of four packages of tax reforms to the National Internal Revenue Code of 1997, or the
Tax Code, as amended.This package introduced changes in personal income tax (PIT), estate
tax, donor's tax, value added tax (VAT), documentary stamp tax (DST) and the excise tax of
tobacco products, petroleum product and more. The TRAIN Act is aimed to generate revenue to
achieve the 2022 and 2040 vision of the Duterte administration, namely, to eradicate extreme
poverty, to create inclusive institutions that will offer equal opportunities to all, and to achieve
higher income country status. It is also aimed at making the tax system simpler, fairer and more
efficient.

Let us remember that the revenues from TRAIN will fund important programs,
such as free education, increase in the salaries of our public school teachers, as well as crucial
infrastructures under the ‘Build, Build, Build’ program. The incremental revenues to be
generated from the Train will help provide the initial capital for the government’s P8.4-trillion
infrastructure modernization program, which will be the catalyst in sustaining the economy’s
high growth trajectory and in transforming it to a high-middle income one by 2022 while
lowering poverty incidence to 14 percent by that time. One major benefit of the infrastructure
buildup is the distribution of wealth to the countryside as farmers and other rural workers
would be able to transport their goods at lower costs and widen their access to markets. People
in urban centers, in turn, will get to enjoy lower prices of basic goods because of the reduced
costs of transporting and distributing them.
In the end, the economic activity that the Train and the infrastructure buildup will
generate will lower the costs for everybody and create more income in other places. So that’s
why we need this tax reform law.