Ranie B.

Monteclaro

TAX 311 – Income Taxation

Case Study No.1

PHILIPPINE TAXATION SYSTEM: Better or Worse?

Not only do our taxes disproportionately burden the poor and

benefit the rich, but they also yield too little revenue given
the distortions they create. Needless to say, both problems need
to be resolved soon. The changes in our taxation system have
contributed a big impact to every citizen in our country. I can
say that every decision has two possible outcomes it’s either
positive or negative or maybe both.

Implementing the Tax Reform for Acceleration and Inclusion

(TRAIN) Law benefits the others while it is a burden for others.
The existing tax structure, where different tax rates are imposed
on different income levels and on different industries, could be
one of the reasons hampering the full potentials of revenue
collection by the government. Try to think of it, if the
government impose a fix tax rate to all different income level
and on different industries. The government can maximize the
collection of tax payments and can save a big funds for public
purposes, but here comes the entities and individuals that has
low income, it is very hard for them to pay tax knowing the fact
that their earnings are just sufficient to their needs. Another
aspect of taxation that has a big impact to our society is the
higher sin taxes. This increase in tax pushes the supplier,
manufacturers, retailer to also increase their prices that later
on leads to decreasing number of demand because of affordability.
The purpose of this action is to control and regulate the
consumer on using sin products especially in cigarettes. The
government wants only to protect our welfare because it is in the
sayings that “Health is Wealth”. Next is in donors tax, we all
know that donors tax deals with donation and donation is a
gratuitous action done by the donor. Lessening the tax rate in
donors tax helps a lot the donee of the said donation. It is so
inappropriate for the government to impose a high tax rate in
which the transaction is beneficial to the welfare of its
citizen. However, sometimes it is being used to unlawful
transactions in order to avoid having big amount of tax payable.

Based on what I have observed, I can say that the Philippine

tax system is improving and really helps our economy to perform
very well. I know it is not perfect but we can see that the
government slowly bringing us wealth. The government was able to
save enough funds to sustain the needs and to improve the
community. Especially in this time of pandemic, the government
really needs a fund to buy all the necessary medical supplies to
serve our country. The government wisely uses its taxation power
to improve the country at the same time protect its citizen. When
we talk about the concept, principles, and theories of taxation
that can be violated by this changes, I think the government
doesn’t violate any of this matters. Everything is in accordance
with the concept, principles, and theories about taxation. If the
government continues to improve their taxation system our country
can sustain every needs of the citizen in full capacity.