Why TRAIN Law should be abolished?

Topic Outline

I. INTRODUCTION

A. Thesis Statement

The three arguments of this essay are to exemplify why TRAIN LAW is not necessary,

beneficial and practical for the Filipino masses.

II. BODY

A. TRAIN Law is unnecessary in the viewpoint of the people in the informal sector.

1. It will only be enjoyed by those salaried individuals in the formal sector.

2. It is unnecessary seeing the informal economy workers will all suffer from high prices of

goods and services.

B. TRAIN Law would not provide beneficial for the Filipinos.

1. There is an increase rate of oil prices due to the impact of TRAIN Law.

2. Most of Filipinos are already tax exempted which they have to deal with more expensive

commodities.
C. TRAIN law is impractical among Filipinos for it will not give them enough benefit rather

it will burden their lives.

1. The unconditional cash transfer (UCT) program will provide a temporary expedient

measure for families which are adversely affected.

2. There is no assurance that the aggregate growth of the economy resulting from

infrastructure development will indeed trickle down to the poor

III. CONCLUSION

A. The TRAIN law may not be perceived as a necessity, beneficially and practicability in

providing economic benefits to the poor.

B. Government should increase the minimum wage of Filipino workers.

C. Government should inform the Filipino masses before implementing such law.
 Why TRAIN Law should be abolished?

The Tax Reform for Acceleration and Inclusion (TRAIN) Act was signed into a law last

December and many Filipinos appreciated this landmark program of President Rodrigo Duterte.

Many economists supported this new tax reform scheme since the lower income tax rates could

provide Filipinos with more disposable incomes and could improve domestic consumption

(Manhit, 2018). However, there are still drawbacks brought by this newly signed law. As years

roll by, the money being spent by the family tends to increase but their salaries do not as often.

This phenomenon burdens those families below the poverty line thus, making the unfortunate

even poorer. That is why the Reform Tax Law will deal more damage to Filipinos as a whole

than the problems it tries to resolve. The three arguments of this essay are to exemplify why

TRAIN LAW is not necessary, beneficial and practical for the Filipino masses.

The said Law is not essential in the viewpoint of the people in the informal sector since they

are beyond the income tax mechanism of the government. The Law was envisioned to lower

income taxes but this reduction in income tax and higher take-home pay under TRAIN will only

be enjoyed by those salaried individuals in the formal sector. According to Niere (2018), it is in

the informal sector where around 90 percent of the poor are located, such as the farmers, jeepney

drivers, vendors, and among others. Train Law is deemed unnecessary seeing that workers who

earned less than 200,000 and were long before exempted from income tax will all suffer from

high prices of goods and services as none of these benefits affects informal economy workers.

Thus, it is not enough to achieve sustainable growth since it increases the prices of almost all

commodities without increasing the minimum wage and does not take into account any other

external factors like fluctuations in the world economy that could further create inflation.
 The newly signed law implemented by the Duterte’s administration will only promote

undesirable bearings to those who are below the poverty line and individuals who belong to the

informal economy. TRAIN law increases the excise of petroleum products. Moreover, minimum

wage earners does not benefit under TRAIN law. According to Padilla (2018), there is an

increase rate of oil prices due to the impact of TRAIN Law which in effect, other commodities

will also be affected by this circumstance. Not to mention that this will also have a negative

effect on public transportation, electricity and other utilities. In addition, most of Filipinos are

already tax exempted; these are Filipinos who are minimum wage earners (Philippine Statistics

Authority, 2009). Yet, at the very start of 2018, these families have already had to deal with

more expensive goods. Jeepney and bus fares, electricity and other utility fees are bound to

increase due to new taxes on oil products including liquid petroleum gas (LPG), Kerosene,

Diesel and Gasoline. These illustrations show that the impact of new tax law through the

Philippine State would not provide for better economic growth and development beneficial for

the Filipinos.

Contreras (2018) states that the aforementioned statements are exactly the reasons “why

there is a subsidy component to the TRAIN Law, which will be implemented by the Department

of Social Welfare and Development (DSWD) through the unconditional cash transfer (UCT)

program’’ (para. 7). Based on this program, qualified households are to be given monthly cash

grant of P200 in 2018 and P300 in 2019 and 2020. The estimated Filipino households and

individuals who belong to the poorest sector of the country who will benefit from this program is

about 10 million. They provide a temporary expedient measure for families which are adversely

affected, hoping that the cash grants will compensate for the increases in household expenditures

due to rising prices of commodities. Nevertheless, the strategy of giving a lumpsum of P2,400 to
a household, without the rudimentary consciousness to save, there is a large possibility that the

amount will end up being quickly spent, therefore its effects would not be felt to be spread out

over the entire year. However, the subsidy appears to be insensitive to it because the UCT

program does not consider the number of household members as long as they will be able to

provide the said amount to ten (10) million households. Aside from that, the TRAIN law is

banking on the economic growth that will be generated by the infrastructures to be built and

whose funds will be drawn from the tax revenues, as well as from foreign development

assistance whose release is premised on the approval of the TRAIN law. The government

foresees that the so-called “Build Build Build” initiative will generate demand for construction-

related work. However, aside from the employment benefits that may result from the

infrastructure rush, it could not still accommodate all 10 million households. Moreover, there is

no assurance that the aggregate growth of the economy resulting from infrastructure

development will indeed trickle down to the poor. Therefore, TRAIN law is impractical among

Filipinos for it will not give them enough benefit rather it will burden their lives.

With all of the presented facts above, the TRAIN law may not be perceived as a

necessity, beneficially and practicability in providing economic benefits to the poor majority and

the impact of the new tax law through the Philippine State would not provide for better economic

growth and development beneficial for the Filipino commonalities. Based on the writer’s

suggestion, the appropriate thing to do by the government is that they should increase the

minimum wage instead of implementing this TRAIN law. In addition, the government should

also take responsibility in informing the Filipino masses in order for them to have a deeper

understanding of how any law that they will be implementing in the future works and to avoid

anomalies and conflicts.

 REFERENCES

Contreras, A. (2018). The TRAIN law and the poor. Retrieved from

https://www.manilatimes.net/train-law-poor/377248/

Manhit, D. (2018). TRAIN: risk or opportunity? Retrieved from

https://opinion.inquirer.net/110447/train-risk-opportunity

Niere, H. (2018). Will the TRAIN Law run us over? Retrieved from

http://davaotoday.com/main/todays-views/will-the-train-law-run-us-over/

Padilla, A. (2018). Excessive oil price hikes under deregulation worsen TRAIN impact. Retrieved

from https://www.bulatlat.com/2018/05/21/excessive-oil-price-hikes-deregulation-

worsen-train-impact/

Philippine Statistics Authority. (2009). Wage and Salary Workers. Retrieved from

https://psa.gov.ph/content/wage-and-salary-workers