TRAIN LAW

This new law also removed the personal exemption of P50,000 and additional exemption of
P25,000. Further, the deductibility of premium payments on health and/or hospitalization
insurance was eliminated. This means that individual income earners will be taxed on gross
basis, without regard for their status.

Lowering the personal income tax (PIT)

• TRAIN will lower personal income tax (PIT) for all taxpayers except the richest.
• Those with taxable income below P250,000 will be exempt from paying PIT, while the
rest of taxpayers, except the richest, will see lower tax rates ranging from 15% to 25% by
2020.
• The personal income tax system of TRAIN will exempt some 83% of current taxpayers.

Rates of taxable income on individuals

Electricity tax
Consumers of electricity may see their monthly bills rise by 8 centavos per kilowatt-hour (kWh)
as early as next month, being the “most immediate” impact of the new tax regime on the power
industry, according to Manila Electric Co.
This means that a typical household that uses 200 kWh a month will pay P16 more for electricity
services.
PH Travel Tax
You need not worry about the travel tax if you’re a foreigner traveling in the Philippines on a
short visit or simply transiting as this fee only applies to citizens of the Philippines, permanent
resident aliens and non-immigrant aliens who have stayed in the Philippines for a period of not
less than one year.

These individuals are also exempted from the travel tax: Overseas Filipino workers (OFWs),
infants (2 years and below), and Filipino permanent residents abroad whose stay in the
Philippines is less than one year.

Travel tax rate First class passage Economy class passage

Full travel tax PHP 2,700 PHP 1,620
Standard reduced travel tax PHP 1,350 PHP 810
Privileged reduced travel tax PHP 400 PHP 300
for a dependent on a Overseas
Filipino Worker (OFW)

Major Changes in Final Taxes

1. All PCSO and Lotto Winnings are now Taxable

Old NIRC TRAIN Law

Prizes - 20% Prizes - 20%
Winnings - 20% Winnings - 20%
PCSO and Lotto Winnings – Exempt PCSO and Lotto
Winnings -
20%***

2. Capital Gains on shares NOT traded in the Stock Exchange

Old NIRC TRAIN Law

Net Capital Gains Net Capital Gains
First Php 100,000 - 5% First Php 100,000 - 15%
In excess of Php 100,000 - 10% In excess of Php 100,000 - 15%

3. Fringe Benefits Tax increase from 32% to 35%

4. Foreign Currency Deposit Unit From 7.5% to 15%