BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 1

\Chapter 1

THE PROBLEM AND ITS BACKGROUND

Introduction

Government have the most important role in the society- environment. Government has

the power to make, amend or even repeal laws. The Tax Reform for Acceleration and Inclusion

(TRAIN law), officially cited as republic act. No. 10963 and it is the initial package of the

Comprehensive Tax Reform Program. It’s an ACT that was proposed by the Department of

Finance to the House of Representative and was signed into Law by our President Rodrigo

Duterte last December 19, 2018. People have their duties to pay their taxes in order for the

Government to have the budget or fund for their projects

Excise tax is a tax that was imposed by the Government. The Government raise the

excise tax of the goods we consume for them to get another fund and they want to reduce the

consumption of unnecessary goods that we purchase or consume. And that affects the behavior

of the consumers. because of the excise tax it will have a big impact to the consumers’ behavior

by buying unnecessary goods.

The Tax Reform for Acceleratin and Inclusion (TRAIN) is the first package of the

comprehensive tax reform program (CTRP) envisioned by President Duterte’s administration,

which seeks to correct a number of deficiencies in the tax system to make it simpler, fairer, and

more efficient. It also includes mitigating measures that are designed to redistribute some of the

gains to the poor. 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
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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. The Vision

of CTRP the tax reform aims to achieve the following: by 2022-2040 poverty rate reduced from

22% to 14% (uplifting some six million Filipinos from poverty). Eradicate extreme poverty.

Inclusive economic and political institutions where everyone has equal opportunities. Achieve

high-income country status. As a complimentary measure TRAIN, Congress introduced Package

1B or the Tax Amnesty Bill. Package 1B includes the lifting of bank secrecy laws and automatic

exchange of information and three types of amnesties (on estate tax, all unpaid internal revenue

taxes with the corresponding waiver of bank secrecy laws in the availment thereof, and

delinquencies). There are also proposals on other amnesty taxes such as importation taxes and

customs duties (Retrieved from www.dof.gov.ph/taxreform/).

The TRAIN Law will also help to grow the Economy in the country as well, by growing

to 1.3% by year 2022. The Gross Domestic Product (GDP) or the total income from domestic

output claimed by the residents of the country will be boosted as a result of a higher household

consumption due to a lower income tax and the cash transfers. The increased economic activity

is buoyed by increased household consumptions and increased investments. Rating agencies

have wanted against stalling of Tax Reform for Acceleration and Inclusion, and its possible

downgrade. Tax reform will allow the government to invest in the people through infrastructure,

education, health, housing and social protection. Fear of spikes in inflation are unfounded.

Inflation will still be within the 2.4% target of the Bangko Sentral Ng Pilipinas, and monetary

policy tools can be used to target inflation. The Train law will affect the inflation rate of products
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causing it to raise by 42% on the year implemented because of the increase in excise tax, but it

will quickly dissipate in the succeeding years (DOF, 2018).

The Government aims to have enough fund to sustain for their projects that’s why they

imposed new law because that is one of their way to gain money for them to provide the needs of

people. They want to have a better education system and to build a lot of classrooms and they

want to invest more when it comes to health services they also want to provide a better facilities

and give a high service for the people. Even in barangay they want to build a barangay health

center. And they also want to provide a better medical technology. Moreover, they will also fund

the infrastructure program of Department of Public Works and Highways (DPWH), which will

make a highways and expressways.

But there will always be another side of that, not every Filipinos is approved with the

excise tax. because not everyone has a lot of earnings most Filipinos salary are minimum wage

so that they are not in favor with the excise tax because their budget for expenses will increase.

and when it comes to transportation the fare will increase that means their expense in fare will

increase and then in sugar sweetened beverages the excise rate per liter is 6 pesos will be taxed

and then 12 pesos per liter on the drinks containing high-fructose corn syrup.

Train relatively decreases the tax on personal income, estate, and donation. However, it

also increases the tax on certain passive incomes, documents (documentary stamp tax) as well as

excise tax on petroleum products, minerals, automobiles, and cigarettes. The train law also

imposes new taxes in the form of excise tax on sweetened beverages and non-essential services

(invasive cosmetic procedures) and removes the tax exemption of Lotto and other PCSO

winnings amounting to more than P10,000 The most popular part of the train law is the reduction
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of personal income tax of a majority of individual taxpayers. Prior to the enactment of the new

law, an individual employee or self-employed and taxpayer would normally have to pay income

tax at the rate of 5% to 32%, depending on one’s bracket. Under Train, an individual with the

taxable income of P250,000 or less will now be exempt from income tax. Those with a taxable

income of above P250,000 will be subject to rate of 20%. Moreover, the deductible 13 th month

pay and other benefits are now higher at P90,000 compared to P82,000 under the old law.

Another innovation under train is the option of self-employed individuals and/or professionals

whose gross sales or receipts do not exceed P3,000,000 to avail of an 8% tax on gross sales or

gross receipts in excess of P250,000 in lieu of the graduated income tax rates. It is not being

highlighted, however, that some items that were previously deducted to arrive at taxable income

had been removed under Train. These are the personal exemption of P50,000, additional

exemption of P25,000 per dependent child, and the premium for health and hospitalization

insurance of P2,400 per year. Over the course of 5 years, Dominguez said that the government

will raise over P786 billion in revenues because of TRAIN the revenues will fund the president’s

priorities: social and infrastructure programs in package one, congress passed two-thirds of the

needed revenues for 2018 and this is expected to pass the balance in early 2018 to help achieve

the revenue deficit targets. The second package of the Comprehensive tax reform program, is

seen to lower corporate income taxes, and modernize fiscal incentives. The government targets

to raise about P2 Trillion from the comprehensive tax reform program to help fund the country’s

massive P8-trillion infrastructure build up. Which is seen to improve people’s lives from all

ranks (retrieved from www.rappler.com/business).

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the brackets and tax rates under TRAIN law are as follows:

Table 1 The new TRAIN income tax Table for the years 2018 to 2022

Source: (www.pinoymoneytalk.com)

From the revenues of TRAIN, 70 percent will go to infrastructure projects. This means

roads, bridges, airports, seaports, and even school buildings and hospital for all Filipinos. It

means spending more time on the road with the horrible traffic also, it means expanding

economic opportunities to the poor with the improved mobility and a more comfortable public

transport system. Also means a better accessibility of services, particularly schools and hospitals,

for the poor. On the other hand, the other 30 percent TRAIN revenues will go to social services

programs. It will help fund free college education in State Universities and colleges, the national

Health Insurance Program, the conditional Cash Transfer Program, among other poverty-

alleviating interventions. For a young developing country like the Philippines, whose median age

is 23-year-old, we must prioritize developing our youth. This means giving them the best

education and healthcare public money can buy. At the end of the day, a country’s greatest

resource is its people. Without TRAIN, the Government will lack the funds to finance these

development priorities (Retrieved from www.dbm.gov.ph).

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Background of the study

Because of the newly approved law a lot of families were affected. Some of the Filipinos

who are working were just minimum wage earner it has a big impact when it comes to their

budgeting. Before their expenses was not exceeding to their income still, they can save. but now

their income was not income because some of the products we consume are affected with the

excise tax.

Before when the TRAIN law was not yet implemented, they can still bought a lot of

goods including the unnecessary goods but now because of the price hike their budget was

limited everything has a high price even the Minimum fare we always use transportation and of

course we need to spend a budget for the fare. Because of the train law everything is affected if

before we can spend a lot to the pleasure and leisure now it was limited because the budget for

that before is now included in the necessary goods we buy.

Train also reduces the exemptions in the Value added tax (VAT) system. When you buy

food or clothes or something you will notice a 12% VAT amount in your receipts. This means

that you pay about 12 percent on top of the actual price of a product you bought. Again, such

revenues are collected by the government for important programs and projects. The problem with

that our VAT system is that too many exemptions have been granted. Ideally, VAT exemptions

should be limited to necessities like raw agricultural food, education, and healthcare.

Unfortunately, our legislators have allowed them to spillover to other sectors who otherwise

should not enjoy VAT exemptions. Train alleviates this situation as it repeals 54 out of 61

exemptions. The taxes on petroleum taxes do not anymore reflect the current economic
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conditions and prices. The taxes on some products have even doubled compared to their previous

rates. The argument for higher taxes on automobiles is similar to petroleum products. It is the

rich who have more cars. The taxes for automobiles will also follow a progressive scale that

luxury cars will be taxed more than regular cars. Besides revenue and redistribution gains. It will

also correct for the traffic congestion costs that car owners impose on the general public. Last on

the list are the taxes for sugar-sweetened beverages. It is primarily a health measure which

doubles as a revenue measure. It aims to curb the consumption which contributes to the diabetes

and obesity cases in the Philippines while also raising ample revenues. Under train, an excise

rate of P6 per liter will be taxed on drinks containing sweeteners, and P12 per liter on drinks

containing high fructose corn syrup (Retrieved from www.dbm.gov.ph).

In March 1750, a decree from the Archbishop of Manila on the creation of new

municipalities was announced in Lagulo Church in Meycauayan. The decree included the list of

families who volunteered to be relocated. Where previously the only occupants were Itas and

Dumagats, San Jose del Monte (SJDM) became a municipality as a result of reduccion from

Meycauayan. These families brought with them rice, wine, nganga and salt from Lagulo (now

Malhacan) in exchange for the wild pigs, deer, yantok and almasigan of the Itas and Dumagats.

Solares, including intended lots for main roads, were peacefully distributed to the new occupants

after being measured and surveyed.

The municipality of SJDM was founded on March 2, 1752. The population, not exceeding 200

people, belonged to the family of farmers and stonecutters of Libtong and Meycauayan. They

lived a simple lifestyle and raised fish, root crops, vegetables, fruits and other natural products.
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Under the American regime in 1901, SJDM, being less progressive, weak and lacking in

peace and order was placed under the political supervision of Sta. Maria, Bulacan. Under

American dispensation in 1918, the town became an independent Municipality with Honorable

Ciriaco Gallardo as the first Municipal Mayor. The Japanese Imperial Army took over the local

government of San Jose del Monte from 1942-1943. In resistance, the municipality formed its

own guerrilla unit. SJDM experienced many casualties when the Americans bombed the

Poblacion on January 11, 1945 and again on January 14, 1945. The Municipal Building was

burned by dissidents on October 10, 1950. The year 1961 marked the opening of the first

Government Resettlement Project, the Sapang Palay Resettlement Area, covering 752 hectares.

In January 25, 1978, nine barangays were created under P.D. 1921. With the passage of the new

local government code in 1991 came the reformulation of equal wealth sharing between the

national and local units and the realization of the residents of having their own barangays. This

move led to the creation of an additional 41 barangays under Provincial Ordinance promulgated

by RA 337 in December 1991. With the advent of the new millennium, SJDM’s population

registered a staggering 315,807. It continues to grow as private subdivisions mushroom in

strategic areas of the Municipality. On September 10, 2000, SJDM was proclaimed as a

Component City under Republic Act No. 8797. It is said to be the largest town in the whole

province of Bulacan in terms of land area and population. Also known as the “Balcony of the

Metropolis”, it is the first City in the province of Bulacan and recorded as the 86th City of the

Philippines. On December 18, 2003, the City of San Jose became the 1st Lone Congressional

District in Bulacan (Retrieved from www.csjdm.gov.ph).

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San Jose Del Monte Bulacan is divided into two districts for representation purposes it is

politically subdivided intro 59 barangays comprise that first district while 36 compose the second

district. The City of San Jose Del Monte is located at the northeast portion of Manila. It is

bounded by the municipalities of Santa Maria and Marilao to the west and Norzagaray to the

north, all of Bulacan, municipality of Rodriguez, Rizal to the southeast, Quezon province lies to

its east, and the cities of Quezon and Caloocan to the south.

The city is approximately 42 kilometers away from manila, it is made up of 59

barangays, all of which cover 10,553 hectares, according to the land management bureau.

However, the Local Government Unit (LGU) claims an actual territorial area of 31,294 hectares;

this includes the disputed areas with adjacent municipalities. The Angat watershed reservation,

which has a land area of 18,000 hectares, is partly within the city. The principal access route to

the city coming from the north is via the Quirino highway and the Marilao-San Jose Del Monte

Road. These roads connect SJDM to Norzagaray and Marilao, Bulacan from Metro Manila, the

city may also be accessed through Quirino Highway after traversing Quezon City and Caloocan

city. Its major links to the western municipalities of Sta. Maria and Marilao are in turn the Sta.

Maria-Sapang Palay Road and Sta Maria-Tungkong Mangga Road. The latter provides the link

with the North Luzon Express way (Retrieved from

https://en.wikepedia.org/wiki/San_Jose_Del_Monte).
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(Figure 1. The Location of San Jose Del Monte Bulacan.)

Source: Google Image

The Francisco Homes is a Part of City of San Jose Del Monte Bulacan which consists of

4 barangays the Barangay Narra, Yakal, Guijo and Mulawin the according to the San Jose Del

Monte Bulacan’s total population from census year 2010 was the Barangay Narra’s total

opulation has a 1,974 while the Barangay Yakal has a 2,407 and Barangay Guijo has a 1,707 and

also the barangay Mulawin has a 1,650 all in all the Francisco Homes total population as of 2010

was 7, 738. Among all of the 4 barangay the Barangay Narra have the most biggest population

compared to the 3 barangays. Also among those 4 barangays the Barangay Narra and Barangay

Mulawin has the Public Market and and when it comes to school Francisco Homes have a 15

schools Public and Private.

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Theoretical Framework

Source: Shiffman and Kanuk (1997)

Figure 2. Maslow’s Hierarchy of Needs

The hierarchy of needs Theory of Maslow’s are consisting of five different levels, the

Physiological needs, safety and security needs, belongingness and love needs, esteem needs and

Self-actualization. the figure above shows the level of needs from lower to higher The

Physiological needs is the lower level of needs and the Self Actualization is the higher level of

needs according to Maslow’s Theory.

The Hierarchy of Needs Theory is famous and it was made by Abraham Maslow way

back 1943. The theory of consumer behavior through the decision making process can consider

the use of hierarchy of need theory of Maslow’s. according to Schiffman and Kanuk (1997), the
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theory of Maslow gives the five basic needs arranging from the lower level needs up to the

higher level of needs before going to the higher level of needs. One the lower level of needs is

satisfied another needs of consumer wants to satisfied up to the higher level of needs. Human

wants are unlimited in number. Whenever one want is satisfied, then automatically several wants

develop. Hence it is endless.

Source:Icek Ajzen (2006)

Figure 3. The Theory of Planned Behavior

The Theory of Planned and Behavior (Ajzen 1985) states that “attitude toward behavior,

subjective, norms and perceived behavioral control, together shape an individual’s behavioral

intentions and behaviors.” the Theory of Planned Behavior through a consumer’s wants and

needs when it comes to purchasing a goods or services the consumer have to consider the

opinion or feedback from others and must consider the capability of availing. Huff and Kelly
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(1999) suggest that a credible behavior is tendency toward relying on a particular thing which

meets a particular requirement so that leads to positive outcome.

Source: Howard in Schiffman & Kanuk (1987)

Figure 4. The Howard-Sheth Model of Buyer Behavior

The Howard-Sheth model of buying behavior, according to Foxall (1990), presents a

sophisticated coordination of psychological and several social and marketing influences on

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cconsumer choice, into an easy-to-understand sequence of information processing, Runyon &

Stewart (1987) and Foxall (1990) added respectively that the model attempts to explain rational

brand choice behavior with the constraints of incomplete information and limited individual

capacities, and that it also provides an empirically testable description of behavior in terms of

cognitive functioning together with its outcomes, Schiffan & Kanuk (1987) explain Howard

Sheth model as a model that explicitly distinguishes between three different stages of decision

making, also reffered to as levels of learning, namely extensive, limited ad routinized problem

solving.

Extensive problem solving implies that the consumer have very little knowledge and

beliefs about purchaisng goods and services . The consumer actively seeks information on a

number of alternatives at this point due to the lack of a brand preferences Foxall (1990), added

that in order to reduce bran obliqueness, the consumer is involved in a decision process and

undertakes prolonged deliberation contemplating which brand to purchase or whether to buy or

not at all.

Limited problem solving occurs when the consumer canot fully assess the brand

differences to arrive at a preference, since knowledge and beliefs about the brands are only

partially established. According to Foxall (1990), other factors to be considered in limited

problem solving are that consumers have formed choice criteria which means, nowing a few

brands well and favoring them equally because they have already tried several brands at this

stage
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Routinized response behavior implies that the consumer has a well -established

knowledge and beliefs regarding the brands and that sufficient experience and information about

the brands will avoid confusion. Routinized response behavior is also characterized by little or

no external search and almost seems to be impulsive (Foxall, 1990).

The Howard-Sheth model presented in Figre 3 consists of 4 major sets of variables.

These variables, according to Schiff & Kanuk (1987), were used as the bases for the discussion

on the Howard-Sheth model whch are inputs, perceptual and learning constructs outputs and

exogenous variables.

TRAIN disregarded equilibrium theory according to Rudy Romeo, if there’s anything

that trained economists were taught to understand and value, it is the concept of economic

equilibrium, more specifically, the preservation of general equilibrium in an economy and the

avoidance of disequilibrium. The more he read the pronouncement of the high officials of the

Department of finance regarding the impact of TRAIN law to the economy, the more he’s

reminded of what his professors drummed into him, disequilibrium comes into being an

economy when the general guide of costs and prices is seriously distressed, in ongoing fashion,

by economic events of either domestic or external origin. The key word here is trigger: a

domestic event (a government action or ruling or a major private-sector debacle) or a foreign

occurrence.

Conceptual Framework
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The conceptual framework is an analytical tool with different variations and contexts. It

is used to make the idea organized. The Input-Output (IPO) model is a functional graph that

identifies the inputs, outputs. The model is sometimes configured to include any storage that

might happen in the process as well. The inputs represent the flow of data and materials into the

processing step includes all tasks required to effect a transformation of the inputs. The outputs

are the data and materials flowing out of the transportation process (Retrieved from

www.sixsigmadaily.com).

PROCESS OUTPUT
INPUT

Assessment of the effect

Demographic profile of
the respondents.
Gather an information
about the effect of
Train law to the
consumer’s behavior
of tax reform for
acceleration and inclusion
to the consumers’
knowing the direct effect
behavior in Francisco
of TRAIN law to pleasure
Homes San Jose Del
and leisure in the
Monte Bulacan.
household of Francisco
Homes San Jose Del
Monte Bulacan.
 Survey
questionnaires
 Analysis of the
data gathered

FEEDBACK

(Figure 5 The research paradigm of the study)

In this IPO model, the research aims to find out how TRAIN law affect the pleasure and

Leisure in the household of Francisco Homes City of San Jose Del Monte Bulacan. The process

will be a way to attain significant conclusion. It includes survey questionnaires and data analysis.

And it will be based on the answer of the respondent to the study.

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Statement of the Problem

This study will focus on the effect on train law to pleasure and leisure in the resident of

Francisco homes. Specifically, it seems to answer the following questions:

1. What is the demographic profile of the respondents in terms of:

1.1 Age

1.2 Gender

1.3 Civil status

1.4 Work position

1.5 Monthly salary

2. What is the purpose of the respondents when it comes to buying an unnecessary goods

and availing services?

3. How do the respondents make their decision when buying an unnecessary goods and

availing services?

4. What problems were encountered by the respondents on the newly approved tax reform

commonly known as TRAIN law?

5. What is the effect of TRAIN law to the pleasure and leisure of the respondents?

Scope and Delimitation of the study

This study limits the coverage to the resident of Franciso homes City of San Jose Del

Monte Bulacan. This will focus on the Direct effect of Train Law to pleasure and leisure in the

resident of Francisco Homes City of San Jose Del Monte Bulacan.

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Moreover, the study will identify the Demographic profile of the Respondents in terms of

age, gender, civil status, work position and monthly salary. The purpose of the respondents when

it comes to purchasing on unnecessary goods and availing services the study will also explore

what problems were encountered by the respondents on the newly approved Tax Reform for

Acceleration and Inclusion commonly known as TRAIN Law Lastly the study will discover what

is the effect of TRAIN law to Pleasure and Leisure in the household of the respondents.

The main source of the data is the questionnaire given to the Respondents and it will also

be limited to the Resident of Francisco Homes City of San Jose Del Monte Bulacan.

Significance of the study

This study aims to highlight the effectiveness TRAIN Law in the Pleasure in the pleasure

& Leisure in the household of Francisco homes San Jose Del Monte Bulacan. The result of the

study will be a great benefit to the Following:

National Government- the national Government will see the effect of train law to pleasure and

leisure. They can easily distinguish the positive or negative impact of Train Law.

Resident of the Francisco Homes CSJDM, Bulacan.- this study can help them determine what

is the effect of Tax Reform for Acceleration and Inclusion commonly known as TRAIN law?

Students- this study can serve as a guide for them if they will conduct same study.

Professors- this research will give them another information regarding the TRAIN law.

Future researcher- they can use this as a source of information.

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To the Academe- this study will benefit academe in this research because more informational

regarding will be topic discuss

Definition of Terms

Government- government has the power to make laws. it’s the one who governs the nation.

Amend- amend is to change something to an act or proposed bill by the Government or if there’s

something they want to add to a law.

Repeal- repeal is that the government has the power to revoke a law so that it will no longer

existing.

Consumers buying behavior- the process where the consumer will purchase goods and avail

services to reach their satisfaction

Consumer- The one who will be satisfied with their wants and the one that was affected by the

Train law.

Imposed- it’s where the Government apply something or implement something.

Tax- it’s the duty of everyone to pay their taxes depending to their income.

Excise tax- it’s a tax that was imposed by the government. It’s the tax on the manufacture of a

goods or services above all other taxes paid on it.

Wage- it’s the amount of money people earn.

Fund- fund is the Government budget for their project.

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Chapter 2

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter comprises of a review of literature and studies related to this study on the

effect of TRAIN lawto pleasure and leisure of Francisco homes City of San Jose Del Monte

Bulacan.

Foreign literature

According to Lagace (2009) The notion of imposing the higher taxes on people is an idea

presents an ideal way to highlight the shortcomings of the weakness current tax policy and how

to make it better. The Harvard Business School professor Matthew C. Weinzierl looks at modern

trends in taxation. If we as a society are uncomfortable taxing height, maybe we should

reconsider our comfort level for taxing ability For Weinzierl, the key to explaining the apparent

disconnect between theory and intuition starts with the particular goal for tax policy assumed in

the standard framework bear. The goal is to minimize the total sacrifice borne by those who pay

taxes. It’s involved in tax policy.

According to Minarik (1998-2018) he stated that in recent years, taxation has been one of

the most prominent and controversial topics in economic policy. Taxation has been a principal

issue in every presidential election. Taxation was also the subject of major, and largely

inconsistent, policy changes. It remains a source of ongoing debate. Economists specializing in

public finance have long enumerated four objectives of tax policy: simplicity, efficiency,

fairness, and revenue sufficiency. While these objectives are widely accepted, they often conflict,

and different economists have different views of the appropriate balance among them. Efficiency
 BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 22

means that taxation interferes as little as possible in the choices people make in the private

marketplace. The tax law should not induce a businessman to invest in real estate instead of

research and development or vice versa. The most efficient tax system possible is one that few

low-income people would want. That superefficient tax is a head tax, by which all individuals

are taxed the same amount, regardless of income or any other individual characteristics. A head

tax would not reduce the incentive to work, save, or invest. The problem with such a tax,

however, is that it would take the same amount from a high-income person as from a low-income

person. It could even take the entire income of low-income people. And even a head tax would

distort people’s choices somewhat, by giving them an incentive to have fewer children, to live

and work in the underground economy, or even to migrate.

A budget is a very powerful tool Ebersole (2018). It gives you the ability to think further

ahead so you can make plans for goals coming up. There's no exact strategy for making and

stabilize a budget. According to ebersole. Every consumer must try every forms of budgeting for

them to know which one will fit for their budgeting, if you've tried unsuccessfully to budget

before, changing up your budgeting strategy may be the key to doing better in the future. Having

a budget planning is one of the best tools for the consumer to know or determine where they

money goes or to balance their expenses it wasn’t required but for every consumer, they need to

make their own budgeting.

Budgeting is the way for you to take control of your ways of budgeting. You have to

Simply put a plan for how you will spend your money. You can create a weekly or even monthly

budgeting. The budget helps you to make financial decisions ahead of time, which makes it
 BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 23

easier to know your overall expenses for a week or a month. Budgeting consistently can help you

turn your finances around and begin to build wealth. A budget a powerful tool because it allows

you to determine how and where you want to spend your money. When you master budgeting,

you make sure that every dollar is being used how you want it. If you have a budget, you can

track your spending and determine if it is matching your priorities. Often when people start

budgeting, they are surprised to see how much money is going to things that are not important to

them, like eating at fast food restaurants or paying for conveniences. Budgeting allows you to

monitor your progress on goals and make sure you are sticking to your budgeting plan. Setting

up a budget is a straightforward process. It helps to have a list of the bills that you must pay each

month as well as your expected income. If you have not budgeted before, you can start by

looking at your past three month’s expenses. Using your financial statements to break these into

categories. If you have budgeting software, you can upload your statements and use the software

to start to sort them. There are different strategies when it comes to budgeting. The strategies are

designed to help make budgeting easier overall. Every person is different and one strategy may

work better you than another strategy. Reading about the different strategies can help you

determine the best budgeting strategy for your personal situation Caldwell (2018)

Foreign study

Cox (2018), Taxation is the imposition of compulsory that is levied on individuals or

entities by governments. Taxes are levied for each and every country around the world, primarily

to raise revenue for government expenditures, although they serve other purposes as well they

imposed taxation in order for the Government to raise a fund for their projects and for the
 BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 24

services they have to give for the people and its nation. In modern economies taxes are the most

important source of governmental project. Taxes differ from other sources of revenue in that they

are compulsory levies and are unrequited they are generally not paid in exchange for some

specific thing. While taxes are presumably collected for the welfare of taxpayers as a whole, the

individual taxpayer’s liability is independent of any specific benefit received. There are,

however, important exception, payroll taxes for example, are commonly levied on labor income

in order to finance reti benefits, medical payments, and other social securities for all who will

become a pensioner. programs all of which are likely to benefit the taxpayer. Because of the

likely link between taxes paid and benefits received, payroll taxes are sometimes called

contribution. Hence, the taxation are in compulsory, Another example of a tax that is linked to

benefits received, if only loosely, is the use of taxes on motor fuels to finance the construction

and maintenance of roads and highways, whose services can be enjoyed only by consuming

taxed motor fuels. During the 19th century the prevalent idea was that taxes should serve mainly

to finance the governemnt. In earlier times, and again today, governments have utilized taxation

for other than merely fiscal purposes.

According to Huddleston (2018) If you’re earning minimum wage, you might not

consider it as a living wage. After all, it can be hard to cover the cost of living in many places if

you’re paid only in minimum wage. If your income is limited, make sure it covers your needs

first. It’s hard to live comfortably if your needs aren’t covered. Creating a budget can help. List

the expenses you have to pay to survive. Add them up, and then subtract them from your income.

If there’s little left over, you might have to make some sacrifices. Don’t think of cutting out

wants to cover needs as deprivation. And if you are only a minimum wage earner you must avoid
 BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 25

debt it can be tempting but to turn to credit cards to cover costs or pay for those wants that don’t

fit in your budget if you don’t really need it you must avoid buying it.

The ultimate goal of taxation is to raise revenue for the government. Although a tax may

be endorsed to encourage or discourage certain behavior, a “tax” must be primarily for revenue

raising. taxes were used to fund the project that government proposed. In some cases certain

taxes do benefit users (Jurinski, 2012). Moreover, taxes are not imposed to make the tax payers

suffer for paying their tax. although taxpayers often complain about paying their tax, their money

will use for the benefits of everyone it can use for the improvement of every facilities and public

services that government rendered for its citizen.

Government funds were came from the tax that was paid by the citizen and the funds was

divided into any programs that government offers from public highways to education to health

program to benefits from elders. Everyone can benefit from the public services even though they

were not a tax payers. Public activities are essential to well-being of a civilized society-law and

order, enforcement of contracts, maintenance of the national society, and other such traditional

needs for government. As the economy has grown and the population has expanded, government

services become more essential (Hildreth, 1999)in creating a pleasant environment in which

environment in which everyone can work and live together. Taxes are the main source of income

of the government. Tax matters (Hildreth & Richardson, 1999).

local literature

Republic Act No. 10963 or Tax Reform for Acceleration and Inclusion (TRAIN)

addresses several weaknesses of the current tax system by lowering and simplifying personal
 BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 26

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. As a complimentary measure TRAIN, Congress introduced Package 1B or the Tax

Amnesty Bill. Package 1B includes the lifting of bank secrecy laws and automatic exchange of

information and three types of amnesties (on estate tax, all unpaid internal revenue taxes with the

corresponding waiver of bank secrecy laws in the ailment thereof, and delinquencies). There are

also proposals on other amnesty taxes such as importation taxes and customs duties.

The Tax Reform for Acceleration and Inclusion (TRAIN) is the first package of the

comprehensive tax reform program (CTRP) was envisioned by President Duterte’s

administration, which seeks to correct a number of insufficiencies in the tax system to make it

simpler, fairer, and more efficient. It also includes qualifying measures that are designed to

reorganize some of the gains to the poor [http://www.dof.gov.ph/taxreform/index.php/train/

(2018, November 17)]. Moreover, the fund that will come from the TRAIN Law will be able to

Fund the Education The in education, achieving a more conducive learning environment with the

ideal teacher-to-students. Also government can invest more in health services to provide better

services and facilities. Lastly, the government will have funds to invest also in public highways

and for a better transportation that everyone will benefit. Funding major infrastructure projects is

possible with tax reform for our country’s inclusive growth

President Rodrigo Roa Duterte signed into law Republic Act No. 10963, also known as

the Tax Reform for Acceleration and Inclusi (DOF, 2018)on (TRAIN) Act, the first package of

the Comprehensive Tax Reform Program (CTRP, on December 19, 2017 in Malacañang. The

TRAIN will be one of the Government sources of income. because of train law it has a big
 BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 27

impact to the tax payers their tax will decrease meanwhile the tax on foods, drinks, and fuel will

increase to incease the Government funds in order for them to spend it on their “build, build

build” and public services programs. This tax reform package alters a long-standing unfairness of

the tax systems by reducing personal income taxes for 99 percent of taxpayers, thereby giving

them the much-needed relief after 20 years non-adjustment of the tax rates and brackets.

According to the department of finance (2017) it is the biggest Christmas and New year gift. The

Government is giving to the people. Retrieved from https://www.dof.gov.ph/index.php/ra-10963-

train-law-and-veto-message-of-the-president/]

According to Diokno (2018) that The most obvious reason for paying taxes is to fund the

providing of public goods and services. He define public goods and services as goods and

services that benefit the general welfare of the people. public goods would include national

defense, administration of justice, internal security, conduct of foreign policy, some types of

infrastructure, and all sorts of programs implemented by the government. The point is without

taxpayer money, the government will not be able to provide its citizens with such public goods

and services. Another reason for taxation, which may not be too obvious to you at this point, is to

approach a more equal society. One of the ways to redistribute wealth is with tax policy. The

third reason for paying taxes is to correct for harmful behaviors that affect many people (the

technical term for this is negative externalities). For instance, a strong argument can be made that

factories spewing toxic chemicals should be asked to pay taxes. These chemicals do not only

pollute the environment but also pose health concerns to people around the area. Imposing taxes

on such activities can correct for negative effects of some economic activities. In short, we pay
 BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 28

taxes to finance projects for the common welfare, to approach a fairer society, and to correct for

harmful activities. Keep these things in mind as we move along.

Local Studies

GMA news online (2018) conducted a study from January to February this year, the

digital research firm RTL found that out of 861 recorded sentiments online regarding the TRAIN

Law, 94.08 percent of the engagement considered not helpful at all for the country. The top three

social media sentiments read by the research analytics group say that the TRAIN law is more of

a burden to the Filipinos, it is anti-poor, and most netizens are generally dismayed by the overall

impact of the said law, it said. The TRAIN was signed into law by President Rodrigo Duterte on

December 19, 2017, effectively lowering the personal income tax rates and expanding the value-

added tax (VAT) (retrieved from https://gmanetwork.com/news/money/economy/647483/most-

filipino-netizens-view-train-law-negatively-study/story/).

According to John Y Campbell (2006) household behavior is difficult to measure, and

households face constraints are not captured by textbook models. Evidence on participation,

diversification, and mortgage refinancing suggests that many households invest effectively, but a

minority make significant mistakes. This minority appears to be poorer and less well educated

than the majority of more successful investors. There is some evidence that households

understand their own limitations and avoid financial strategies for which they feel unqualified.

Some financial products involve a cross-subsidy from naïve to sophisticated households, and this

can inhibit welfare-improving financial innovation.

Synthesis and Relevance of The Study

 BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 29

Cox (2018), Taxation is the imposition of compulsory that is levied on individuals or

entities by governments. According to Lagace (2009) The notion of imposing the higher taxes on

people is an idea presents an ideal way to highlight the shortcomings of the weakness current tax

policy and how to make it better. Caldwell (2018) Reading about the different strategies can

help you determine the best budgeting strategy for your personal situation. According to Minarik

(1998-2018) he stated that in recent years, taxation has been one of the most prominent and

controversial topics in economic policy. Taxation has been a principal issue in every presidential

election. A budget is a very powerful tool Ebersole (2018). It gives you the ability to think

further ahead so you can make plans for goals coming up. According to Huddleston (2018) If

you’re earning minimum wage, you might not consider it as a living wage. After all, it can be

hard to cover the cost of living in many places if you’re paid only in minimum wage. (Jurinski,

2012) taxes are not imposed to make the tax payers suffer for paying their tax. Taxes are the

main source of income of the government. Tax matters (Hildreth & Richardson, 1999).

According to Diokno (2018) that The most obvious reason for paying taxes is to fund the

providing of public goods and services. He define public goods and services as goods and

services that benefit the general welfare of the people. According to John Y Campbell (2006)

household behavior is difficult to measure, and households face constraints are not captured by

textbook models. Republic Act No. 10963 or Tax Reform for Acceleration and Inclusion

(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.
BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 30
 BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 31

Chapter 3

RESEARCH METHOOLOGY
In this chapter the study will focus on the researcher’s method that will be use to gather
information. It will contain the Respondents’, profile survey instrument that will use and the
statistical treatment of data.

The method of research will use

The descriptive method of research will used in this study. Since the study is concerned

with the effect of TRAIN Law to Pleasure and Leisure of Household. The quantitative method of

research will be the appropriate one to use. It will give accurate interpretation of findings. the

researchers will choose the way to observe the problem is to follow the guidelines given by

Hirsjarvi and Hurme(1980) whereby the objectives to understand specific phenomena should be

approach with qualitative methodology. The methods will choose to fit the objective in this

study.

The Population, sample size and sampling technique

the target respondents of this study is the residents of Francisco Homes CSJDM, Bul.

From this population the target respondents will be divided fairly into four (4) groups. Each

group will consist of fifty (50) respondents that will be obtained from four (4) different barangay

among Francisco Homes. In gathering the target respondents, the researchers will use the

fishbowl draw technique. This sampling technique is applicable especially if the total population

small. Each units of the population is represented by a slip paper with a number, all the slip paper
 BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 32

will put in the jar and will shuffle, and the slips will be pulled out one by one without looking at

it until the number of slips selected equals the sample size.

The researcher will use random sampling where a group of subject will be selected from

a larger group of a population. each individual will chose entirely by chance and each member of

the population has an equal chance of being included In the sample. Every possible sample of a

given size has the same chance of selection.

Description of the Respondents

Residents of Francisco Homes City of San Jose Del Monte Bulacan where the

respondents in the study. The total number of the respondents is 200 50 respondents where from

Barangay Narra the other 50 is From Barangay Guijo the other 50 is From barangay Mulawin

and the last 50 is From barangay Yakal.

Instrumentation

For the purpose of data gathering the researchers will use a survey questionnaire as the

main instrument. The researchers will use a self made questionnaire to gather the data needed for

the study on the Effect of TRAIN Law to Pleasure and Leisure of the Household in Francisco

Homes City of San jose Del Monte Bulacan. The questionnaire will be divided into 4 parts the

first parts is the Demographic profile of the Respondents in terms of Age, Gender, Civil Status,

Work position and Monthly Salary the part 2 is all about the purpose of respondents in buying

unnecessary goods and availing services. Part 3 is the assessment of the respondents on the level

of importance of the factor consider in buying unnecessary good and availing services. Part 4 is
 BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 33

the respondents’ process of making their purchasing decision when buying a unnecessary goods

and availing services. The researchers will prepare a questionnaire with the guidance of the

adviser and will be approve by the thesis professor.

Data Gathering procedures

Before the actual gathering of data, the researcher will ask first the permission of the

administrators of Bulacan State University- Sarmiento Campus to perform a study outside the

school. Once the permission is approve the researcher will formally visit all the selected

respondents that are included in the study and will personally ask a permission if the researchers

can conduct a survey.

The researcher will formulate the distribution of the questionnaires to the respondents

using the fishbone technique. The reason why this sampling technique will be implemented is

because it will not create any biases during the gathering of data. But before the actual

distribution of questionnaire the researcher will inform the respondents that everything they right

on the questionnaire will be safe and confidential.

When the gathering of data has been done

, this study will utilize a quantitative method to identity the needed data. Then after the

questionnaires will be collected, statistical test will perform in the tabulation of all data collected

from the respondents. These data will be treated using the statistical tools.

Statistical Treatment of the data

 BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 34

as indicated in the method of research the study will utilize, quantitative method to

identify the needed data. After all the questionnaires are collected, statistical test will be

performed; the data will be tallied , tabulated and interpreted using a frequency distribution

technique.

The formula used in frequency distribution is listed below:

n= number of observations or responses

N= total number of cases

Likert Scale will be used in this research. The Likert scaling technique assigns one scale
value of each of the different responses. The scoring system for each item must be such a high
score consistently reflects a favorable response and a low score consistently reflects an
unfavorable response.

The consolidated points from the respondents answer to each item over a five-point scale
where presented below:

Value Verbal Interpretation Statistical Limit

Strongly agree 4.6 – 5.0

Agree 3.6 – 4.5
Not applicable 2.6 – 3.5
Disagree 1.6 – 2.5
Strongly Disagree 1.0 – 1.5
Moreover, ranking will also be applied to arrange the data from lowest to highest.
 BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 35

Bibliography

Caldwell, M. (2018, april 24). Budgeting and Personal Finance . Retrieved from
https://www.thebalance.com: https://www.thebalance.com/budgeting-4074043

Cox, M. (2018). Britannica. Retrieved from https://britannica.com:

https://www.britannica.com/topic/taxation

DOF. (2018). Department of Finance . Retrieved from www.dof.gov.ph:

http://www.dof.gov.ph/taxreform/index.php/train/

Ebersole, J. (2018, jan 24). US. NEWS. Retrieved from https://money.usnews.com:

https://money.usnews.com/money/personal-finance/saving-and-budgeting/articles/how-to-
make-a-budget-and-stick-to-it

Hildreth, B. &. (1999). book. Retrieved from https://books.google.com.ph:

https://books.google.com.ph/books?id=1CkRqHZ0caYC&pg=PA21&lpg=PA21&dq=hildreth+and+
richardson+1999&source=bl&ots=IRBKsyF5z2&sig=i1-
1wPf3jy8jCnc7g5N4G29ZPi8&hl=en&sa=X&ved=2ahUKEwjrpuuut4I7fAhVMK48KHfZdAvsQ6AEw
BnoECAgQAQ#v=onepageq=hildreth%20andrichardson

huddleston, C. (2018, february). Banking Rates. Retrieved from https://www.google.com.ph:

https://www.google.com.ph/amp/s/www.gobankingrates.com/saving-money/budgeting/how-
to-live-comfortably-on-minimum-wage/amp/

Jurinski, J. J. (2012). ABC-CLIO. Retrieved from https://www.abc-clio.com: https://www.abc-

clio.com/ABC-CLIOCorporate/product.aspx?=a1892C

Lagace, M. (2018, july 02). WORKING KNOWLEDGE. Retrieved from https:hbswk.hbs.edu/:

https://hbswk.hbs.edu/pages/browse.aspx?HBSTopic=Taxation

Minarik, J. J. ((1998-2018)). Econlib. Retrieved from https://www.econlib.org:

https://www.econlib.org/library/Enc/Taxation.html

ONLINE, G. N. (2018, march 22). GMA NEWS ONLINE . Retrieved from www.gmanetwork.com:
https://www.gmanetwork.com/news/money/economy/647483/most-filipino-netizens-view-
train-law-negatively-study/story/
 BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 36

THE DIRECT EFFECT OF TRAIN LAW TO PLEASURE AND

LEISURE OF THE HOUSEHOLDS IN FRANCISCO
HOMES SAN JOSE DEL MONTE
BULACAN
BULACAN: AN ASSESSMENT
(ANG PAGSALUNGAT NG GOBYERNO LABAN SA ILEGAL NA
PAUTANG SA SAN JOSE DEL MONTE: ANG PAGPAPAHALAGA)
()

(note: this questionnaire may help the researchers to gather data and information about their
thesis topic)
Please specify your answer by indicating a check (/) symbol on the box that represents the most
appropriate.

Part 1: Demographic Characteristics of the Respondents.

1. Gender female male

2. age below 21 years old 36-55 years old

21 – 35 years old 55 years old and above

3. Marital Status single married widow

Seperated

4. Work position professional Employee

5. Monthly income 20,000 below 20,000 above

25, 000 above 30,000 above

Part 2: Purpose of the respondent in purchasing unnecessary good and availing services.
a) Personal Choice c) for own satisfaction
b) Family purpose

Part 3: The Impact Of Train law to Pleasure and Leisure in The Household of Francisco Homes
Please rate the following on a scale of 1-5 (5-Strongly Agree, 4- Agree, 3-Neutral, 2- Disagree,
1- Strongly Disagree)
 BULACAN STATE UNIVERSITY – SARMIENTO CAMPUS 37

Impact of TRAIN Strongly Agree (2) Neutral (3) Disagree (2) Strongly
Law Agree (1) Disagree (1)

a) Purcahisng
alternative
unnecessary
goods
b) Availing
cheaper
service

c) Decrease the
family
activities

d) Decrease the
budget in
grocery