Nina Angela C.

Tatoy August 22, 2021

Mr. Jizryl Raz, CPA, MSAIA TAX 311

The Tax Reform for Acceleration and Inclusion Law (TRAIN Law), also known as
Republic Act No. 10963, is the first package of President Rodrigo Duterte's Comprehensive Tax
Reform Program (CTRP), which was signed into law on December 19, 2017.
The Train Act is the first of four tax reform packages to the National Internal Revenue
Code of 1997, also known as the Tax Code. Personal income tax (PIT), estate tax, donor's tax,
value added tax (VAT), documentary stamp tax (DST), and the excise tax on tobacco, petroleum,
mineral products, vehicles, sweetened beverages, and cosmetic operations were all changed as
part of this package. The tax reform has two main features: a reduced personal income tax and a
greater consumption tax. Individuals with taxable income of less than $250,000 per year are free
from paying income tax. The minimum wage earner's exemption has been preserved in the new
tax system. Individual taxpayers' tax ratew`s are remain progressive, with a maximum rate of 35
percent and minimum rates of 20 percent (taxable years 2018 to 2022) and 15 percent (taxable
years 2018 to 2023). (2023 onwards). Consumption taxes, in the form of higher excise taxes on
tobacco, fuel, vehicles, and tobacco, as well as an additional excise tax on sweetened beverages
and non-essential, invasive cosmetic operations, were enacted. It also broadened the VAT base
by abolishing exemptions in a number of special laws.
The TRAIN Act aims to produce revenue in order to realize the Duterte’s
administration's 2022 and 2040 visions, which include eradicating extreme poverty, creating
inclusive institutions that provide equal opportunities for all, and achieving higher income
country status. It also aims to make the tax system more straightforward, equitable, and efficient.
Regardless, there have been disagreements concerning the law's passage since its inception, and
its subsequent reception by the public since its ratification has been contentious. Both favorable
and bad outcomes were observed in the first quarter of 2018. The economy experienced an
increase in tax collections, government spending, and GDP growth. Unprecedented inflation
rates that exceeded projections, on the other hand, have sparked widespread outrage and
criticism. There have been requests to suspend and change the statute in order to protect specific
industries from price increases.
It has been suggested that this reform method will tax a poorer, less affluent populace.
This was the information that the government made public. The truth is that more taxes imposed
by the government are passed on to the middle and lower classes, raising inflation. The Train law
affect the poorest households, necessitating government assistance in the form of unconditional
cash transfers of P300 to P400 per month for the next three to four years. Train imposed a few
excise taxes that favored the wealthy at the expense of the less fortunate. Lower donor taxes and
estate taxes benefited some wealthy and elite families, whereas the lower section of the
population suffered losses as a result of this tax reform package.
Based on research presume that the perceived effects of Tax Reform for Acceleration and
Inclusion (TRAIN) law are meeting the basic needs, mental health and well-being, and family
and community support. In which concluded that these effects are making the poor the poorest