EXERCISE 4.3.

TRAIN LAW

The Republic Act No. 10963 or known as the Tax Reform for Acceleration and
Inclusion (TRAIN) Act, was signed by the current President of the Philippines, Rodrigo
R. Duterte on December 19, 2017 in Malacanang Palace. There are five provisions
written in this Act. Mainly, it could cut the income tax of the Filipino taxpayers in line with
raising the funds of the government in order to provide different services to our nation.
Nevertheless, the Act corrects the inequity of the taxation system by minimizing the
personal income taxes. The goal of our President is to minimize the poverty incidence to
14%.

The TRAIN Law has five provisions that are needed to be followed. First, the
income tax of employees from Regional Headquarters (RHQs), Regional Operation
Headquarters (ROHQs), Offshore Banking Units (OBUs), and Petroleum Service
Contractors and Subcontractors should be reduced. Secondly, the sales of goods and
services should have a zero-rating in order to separate customs territory and the zones
of tourism enterprise. Third is gross sales/receipts not exceeding five hundred thousand
pesos should be exempted. Fourth provision states that there is an exemption from
excise tax of different petroleum products. Last but not the least, designating a specific
purpose of tobacco taxes. TRAIN has its own positive and negative effects to our
country. The Department of Finance said that the TRAIN has a low effect on the
inflation rate of our country, which only contributed about 0.4% last June 2018. In
addition, it has a good impact on the infrastructure program since it benefits most of the
local communities. It also opened a way to jobs under the construction sites. As of April
2019, the Philippine Institute for Development Studies (PIDS) stated that the
implementation of TRAIN worsened those people who are under the lower-income
households. There was an increase in the poverty incidence about 0.32 percent among
the farmers. Not only an increase in poverty was seen in farmers, but also for
fishermen. Another effect of this law is that as of 2019 until 2022, there was an
estimated loss for higher revenue which is about Php 223 billion. Lastly, the most
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popular changes that was seen when this law was implemented was the higher price of
the sugar and products that have glucose or sucrose.

This way the TRAIN Law was written and how it states various provisions that
could benefit our nation is good and very catchy. But the problem with this law is how
the government maintain or handle this Act. Some of the politicians always promise that
they would let everyone out of poverty, but their actions say so much with their words.
There are lots of citizens who are still in pain due to having a low income. Yes, taxes
are exempted to some of the Filipino workers only, but what about the others who earn
high wages. Also, putting a high price on the sugary products is valid since there is
really a high percentage of Filipinos that suffer from diabetes. Overall, the Act could
really go well if and only if the government in this country do their jobs right.