Sir Ed Comments g19 Macalinao

St.
Vincent College of Cabuyao

Mamatid City of Cabuyao, Laguna
BACHELOR OF SCIENCE IN ACCOUNTANCY 1
“PERCEIVED EFFECTS OF RA NO. 10963 (TAX REFORM FOR

ACCELERATION AND INCLUSION LAW) OF SELECTED SOCIAL
CLASSES IN CABUYAO, LAGUNA”
An Undergraduate’s Thesis
Presented to the
Faculty of the College of International Business Studies
St. Vincent College of Cabuyao
____________________
In partial fulfillment
of the requirements for the Degree
BACHELOR OF SCIENCE IN ACCOUNTANCY
____________________
By
ALLEXANDRA O. MACALINAO
LAWRENCE MAE L. GRAVADOR
ALDREALIN E. PANES
APPROVAL SHEET
This project feasibility study hereto entitled:
“Percieved Effects of RA No. 10963 (Tax Reform for Acceleration and Inclusion
Law) of Selected Social Classes of Cabuyao, Laguna”
Prepared and submitted by Allexandra O. Macalinao, Aldrealin E. Panes

and Lawrence Mae L. Gravador, in partial fulfillment of the requirements for the
degree, Bachelor of Science in Business Administration has been examined and
recommended for acceptance and approval for PROPOSAL DEFENSE.
RICHARD PEREZ, CPA, MBA, CTT, MRITax

Approved by the Committee on Oral Examination with a grade of
___________________
FRITZ PEREZ, CPA,CTT, MRITax, CEMP, MBA

Chairman
Practitioner Member
Accepted in partial fulfillment of the requirements for the degree of Bachelor
of Science in Business Administration
FRITZ PEREZ, CPA, CTT, MRITax, CEMP, MBA

Program Head, CIBS Department
ADVISER’S ENDORSEMENT LETTER
This thesis titled “Percieved Effects of RA No. 10963 (Tax Reform for
Acceleration and Inclusion Law) of Selected Social Classes of Cabuyao,Laguna”,
prepared and submitted by, Allexandra O. Macalinao, Aldrealin E. Panes and
Lawrence Mae L. Gravador, In Partial Fulfillment of the Requirements for the
Degree of Bachelor of Science in Accountancy has been examined and recommend
for Oral Defense.

Research Adviser
January 28, 2022
Sir
Greetings!
We, Allexandra O. Macalinao, Aldrealin E. Panes and Lawrence Mae L.

Gravador. Students of St. Vincent College of Cabuyao are Currently writing our
research study entitled “Percieved Effects of RA No. 10963 (Tax Reform for
Acceleration and Inclusion Law) of Selected Social Classes of Cabuyao,Laguna”.
We are very much aware of your expertise in the focus of our study. Your
credential speaks a lot of your perspicacity and shrewdness in the field.
In this regard, we are requesting your approval to stand as our research adviser
and we are looking forward that contribution to this undertaking will be of great
importance.
Your affirmative response and approval to this request will be whole-heartedly

appreciated. Thanks a lot and God bless you a thousand folds.
CERTIFICATE OF GRAMMAR EDITING
This certifies that the Bachelor of Science in Accountancy study entitled
“Percieved Effects of RA No. 10963 (Tax Reform for Acceleration and Inclusion
Law) of Selected Social Classes of Cabuyao,Laguna”, prepared and submitted by,
Allexandra O. Macalinao, Aldrealin E. Panes and Lawrence Mae L. Gravador, has
been subjected to Language Editing at St. Vincent College of Cabuyao, by the
undersigned.
CERTIFICATE OF STATISTICIAN
This certifies that the Bachelor of Business Administration major in Marketing
Management feasibility study entitled “Percieved Effects of RA No. 10963 (Tax
Reform for Acceleration and Inclusion Law) of Selected Social Classes of
Cabuyao,Laguna”, prepared and submitted by, Allexandra O. Macalinao,
Aldrealin E. Panes and Lawrence Mae L. Gravador, has been subjected to
Financial Consultation at St. Vincent College of Cabuyao, by the undersigned.
_____________________________________
CERTIFICATE OF ORIGINALITY
We herby declare that the submission of this thesis entitled: “Percieved
Effects of RA No. 10963 (Tax Reform for Acceleration and Inclusion Law) of
Selected Social Classes of Cabuyao,Laguna” for the degree of Bachelor of Science
in Accountancy at St.Vincent College of Cabuyao is our work, and that is to the best
of our knowledge and belief. It contains no material previously published or written
substantial extent has been accepeted to award any other degree or diploma of a
university.
We also declare that the content of this thesis is the product of our work, even
though we may have received assistance from another in style presentation and
language expression.
The Researchers:
Allexandra O. Macalinao
Lawrence Mae L. Gravador
Aldrealin E. Panes
TABLE OF CONTENTS
PAGE
Title Page I
Approval Sheet II
Adviser’s Endorsement III
Adviser’s Appointment IV
Certificate of Grammarian V
Certificate of Statistician VI
Certificate of Originality VII
Table of Contents VIII
Chapter 1 1
The Problem and Its Background 1
Introduction 2
Theoretical Framework 5
Statement of the Problem 8
Conceptual Framework 9
Hypothesis 10
Scope and Delimitation 11
Significance of the Study 12

Definition of Terms 13
Chapter 2 14
Review of Related Literature 14
Relation of Marlow’s Hierarchy of Needs to TRAIN Law 14
What Is Social Class? 16
Effects of TRAIN Law towards Upper Income Class 17
Effects of TRAIN Law Towards Middle Income Class 19
Effects of TRAIN Law Towards Lower Income Class 20
Perceived Effects of TRAIN Law 22
Take Home Pay 24
Lifestyle 26
Comprehensive 28
Independent to Dependent Variables 30
Synthesis 33
Chapter 3 34
Research Methodology 34
Research Design 34
Research Locale 34
Population And Sampling 35

Research Instrument 36
Validation Of The Instrument 36
Date Gathering Procedures 37
Ethical Considerations 37
Treatment Of Quantitative Data 38
Survey Questionnaire 39
References 45
CHAPTER 1
This chapter provides data about RA. No 10963 (Tax Reform for Acceleration
and Inclusion Law) and discusses the introduction, theoretical framework, statement
of the problem, conceptual framework, hypothesis, scope and delimitations, the
significance of the study, and the definition of terms.
INTRODUCTION
Republic Act No. 10963 or known as Tax Reform for Acceleration and
Inclusion Law (TRAIN Law) implemented by President Rodrigo Duterte in the year
2018, this law intends to make the Philippine Tax System simpler and fairer. It
includes the amendments to some provisions on personal income tax, excise tax,
value-added tax, estate tax, etc. It will also support the President’s Build, Build,
Build, Project to enhance our education, health, social services and also to sustain
high growth of the country. Diminished charge rates recommend higher take-home
pay for workers. Due to impact to income, the people who experienced extension in
optional income due to obligation cut will likely have expansion known for specific
items. Since the tax cut has wide incorporation of residents, changes will influence
market costs. In like manner, development in remove appraisal of specific things,
similar to oil-based commodities, will prompt an augmentation not simply in the
expenses of such things yet furthermore in the expenses of items that use the troubling
things as midway commitments to their productions.

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President Duterte's goal is to carry out the UHC program which is the best
healthcare system. It is intended to give quality and reasonable medical services to all,
particularly to unfortunate families. The revenues that will be collected from the "sin"
tax is will be used to fund the UHC program. Smoking is one of the common
problems and reasons for death in the Philippines. The dropped in smokers these years
shows the effectiveness of excise tax on tobacco and cigarettes to lowering the
number of smokers in the past years since it was implemented. Poor people suffer
since the price of the commodities increases as time passes by. In addition,
implementation of the train law also affects Filipinos since there is an increase in
excise taxes. One exampleis the petroleum products that may cause a domino effect
that will lead to an increase of goods and services that will be shoulder by the
consumers. Thus, the Train law caused an unexpected increase of 6.7% inflation rate
during October 2018 and reduced the purchasing power of an individual.
Under the Tax Reform for Acceleration and Inclusion Law, the expense forced
on development materials expanded. Likewise, the TRAIN Law forced higher
expenses on different materials and administrations connected with development. The
old VAT threshold of P1.9 million based on gross sales will be raised to P3 million
under House Bill 5636, the substitute Comprehensive Tax Reform (CTRP) bill also
known as the Tax Reform for Inclusion and Acceleration Act, currently undergoing
plenary deliberations in the House of Representatives. When TRAIN Law was
legislated, without appropriately educating general society regarding its suggestions
on salary, costs of labor and products, and shopper spending designs. Along with the
increment of expansion rate, necessity products like rice, canned merchandise, and
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other stock are beginning to have the expansion in costs. Financial specialists caution
that TRAIN Law can convey adverse consequences to the economy.
Maslow's hierarchy of needs is a psychological theory that explains human
motivation through the pursuit of several levels of needs.This list starts with the most
basic necessities and progresses to more complex requirements. Physiological needs,
safety needs, social needs, self-esteem, and self-actualization are all included in
Maslow's hierarchy of needs. Managers can utilize this five-level hierarchy to better
understand their employees' motivation and address it in ways that lead to increased
productivity and job satisfaction.
The connection of studying the effects of RA No. 10963 or the Tax Reform
for Acceleration and Inclusion Law on accountancy students is that they must have
the information of the advantages and disadvantages of this law. To the businesses,
citizens, and the taxpayers of the different social classes of the society to perceive the
benefits as future certified public accountants or tax accountants. They must
understand the changes in tax rates from old to new law regarding income,
necessities, and other taxables that might affect the economy are in the scope of this
law.
There are some significant concerns under the implementation of train law, the
high excise taxes on petroleum products, sweetened beverages, automobiles, and
cigarettes. In return for this, the funds from the taxes are for the Governments'
program. This study aims to dig deeper regarding the information of train law and
educate taxpayers to become knowledgeable about the effects of train law. In

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addition, it could give them learnings if the law is beneficial in the social classes of
our country or if it could have worsened and increased the poverty rate.
Most Filipinos have expenditures in their everyday life such as food expenses,
rental, utilities, transportation, etc., and the implementation of train law has a big
impact on it. Everyone was concerned since it affects them and those expenditures
could not be prevented. This study aims to determine the perceived effects of R.A.
10963 or Tax Reform for Acceleration and Inclusion Law of the selected social
classes in Cabuyao, Laguna. There are only a few studies about train law since
implemented in 2018. This study challenged the researchers to provide an informative
and reliable type of research. It also aims to identify the level of comprehensive and
knowledge of each Filipino in different social classes regarding train law. It also aims
to develop inputs to lawmakers and provide recommendations on how to improve the
law for everyone's sake.

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THEORETICAL FRAMEWORK
The fulfillment of various needs might be defined as human motivation. These
needs might include a wide range of human desires, ranging from basic, tangible
survival needs to complex, emotional needs related to a person's psychological well-
being. According to Maslow's hierarchy of requirements, if the lower need is not met,
the higher wants would be ignored. Workers can become disturbed if their
requirements aren't tended to. Also, after a need has been met, it no longer serves as a
motivator, and the next level up in the hierarchy of needs will become more
essential. Keeping individuals involved can have all the earmarks of being a
impacting objective according to the point of view of the executives. People rarely fit
neatly into pyramids or diagrams, and their demands are complex and always
changing.
As indicated by the Bureau of Internal Revenue, the Implementation of Train
Law increased the excise taxes on petroleum products, automobiles, sweetened
beverages mineral products, etc. to raise an additional fund that will support the
Government's social services programs and the "Build, Build, Build" program
(Department of Finance, 2017). As mentioned by the Department of Trade and
Industry's Almer Masillones "We pay taxes because those are used to fund provisions
of public goods and services that benefit the general welfare of the people" Numerous
purchasers previously felt the price increase in their favorite refreshments. In S&R,
membership shopping will no longer be serving unlimited soda due to the law because
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a one-liter bottle of Coca-Cola now costs PHP 43, originally priced at PHP 31—a
whopping upsurge of PHP 12 (Gonzales, 2018).
The price of fuel has been steadily increasing in recent months due to many
factors including the implementation of the TRAIN law and under the first package of
the tax reform law, the levy on gasoline has increased to P7 per liter from P4.35 and
imposed an excise tax of P2.50 per liter on diesel and it is expected that the excise tax
will reach P4.50 in 2019 (Rappler, 2018, July 20). Commuters will have to pay a
minimum fare of P10 in the jeepneys this November after the Land Transportation
Franchising and Regulatory Board (LTFRB) took into consideration the welfare of
jeepney operators and drivers and approved the petition citing the rising prices of fuel
and the effects of the tax reform law as the reasons for seeking an increase in the base
fare of five transport groups for a fare hike (Tupas, 2018) and it has a domino effect in
consumers as the Philippines have approximately 200,000 public transportation
(Mariano, 2017). The Department of Finance (2017) added that 99% of the country’s
taxpayers will get to have higher take-home pay. However, Alan Tanjusay,
spokesperson of the Associated Labor Union – Trade Union Congress of the
Philippines (ALU-TUCP), attested that representatives with available pay are the ones
in particular who have the upper hand in the implementation of the TRAIN Law
(Medenilla, 2017).
Given the increase in people’s disposable income, consumption will spur.
While the personal income taxes of the salaried workers were cut down to increase
their disposable income and purchasing power, most self-employed workers,
particularly those who belong to the informal sector, are still at a disadvantage. Before
the implementation of the law, they did not have to pay personal income taxes, to
7
begin with (Fuentes, 2018). In this manner, they get no comparable advantage and
must choose the option to fork over more cash because of higher extract charges
collected on specific items like petrol. With the growth in costs of specific
merchandise for expenditure, their salary may effortlessly be depleted, since they
don't get extra pay.
Maslow's hierarchy of needs will help the researcher to understand and
interpret the results of the study. It will give enough insights into how people perceive
the effect of RA No. 10963 (Tax Reform for Acceleration and Inclusion Law). It will
also account for the differences in the social classes that will give the researcher
enough wisdom about the needs that dictate an individual's behavior.

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STATEMENT OF THE PROBLEM
This Research seeks to analyze the Perceived Effects of RA No. 10963 (Tax
Reform for Acceleration and Inclusion Law) of Selected Social Classes of Cabuyao,
Laguna. To acquire all the principal knowledge, facts and datas, the researchers
addressed the following research questions:
1. What is the level of Perceived Effects of RA No. 10963 (Tax Reform for
Acceleration and Inclusion Law) in Cabuyao, Laguna as assessed by Selected Social
Classes in terms of:
1.1 Lifestyle
1.2 Take Home Pay
1.3 Comprehensive
2. Is there a significant difference between the assessments of the Selected Social
Classes as regards the level of Perceived Effects of RA No. 10963 (Tax Reform for
Acceleration and Inclusion Law) in Cabuyao, Laguna?
3. Based on the findings of the study, what inputs may be proposed?

9
CONCEPTUAL FRAMEWORK
Independent Variable Dependent Variable
Classification of Social Perceived effects of RA No.

Classes in terms of: 10963 (Tax Reform for
Acceleration and Inclusion
Law) in terms of:
 Upper-Income Class
 Lifestyle
 Middle-Income Class  Take Home Pay
 Lower-Income Class  Comprehensive
Figure 1: The Research Paradigm
As part of this study, the researchers desired to scrutinize if the level of
Perceived effects of RA No. 10963 (Tax Reform for Acceleration and Inclusion Law)
has an impact on Selected Social Classes in Cabuyao, Laguna. RA No. 10963 or
TRAIN Law intends to make the Philippine Tax System simpler and fairer. It will
also support the President’s Build, Build, Build, Project to enhance our education,
health, social services and also to sustain high growth of the country. Figure 1 depicts
the main concepts of this research. The main emphasis of this research is to establish
if the perceived effects of the RA No. 10963 (TRAIN Law) in terms of lifestyle, take
home pay, and comprehensive have a crucial effect on selected social classes of
Cabuyao, Laguna.
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HYPOTHESIS
In this study, the following null hyphothesis were tested for significance:
Hyphothesis 1. There is no significant difference between the selected social classes
and the implementation of Train Law.

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SCOPE AND DELIMITATIONS
The general intent of this study is to understand the perceived effects of RA
No. 10963 (Tax Reform for Acceleration and Inclusion Law) on selected social
classes of Cabuyao, Laguna. This study will specify and evaluate the different effects
of RA No. 10963 (TRAIN Law) on taxpayers. This study is limited to three sub
variables in terms of lifestyle, take home pay and comprehensive. The respondents of
this study are the selected social classes which are the upper, middle, and lower social
classes in Cabuyao, Laguna.

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SIGNIFICANCE OF THE STUDY
This study aims to find out the perceived effects of RA No. 10963 (TRAIN
Law) on selected social classes of Cabuyao, Laguna. The result of the study will
benefit the various sectors as follows:
Lower Class- The informations in this study will benefit the lower class by
learning that they are the main beneficiary of RA No. 10963 (TRAIN Law),
understand the reason why the cost of goods and commodities in the country has
increased, and they will benefit more from this law implemented by the government.
Middle Class- The informations in this study will benefit the middle class by
learning more informations about the difference of tax rates of old law to TRAIN
Law.
Upper Class- The information in this study will benefit the upper class since
they will know where the tax deducted from their income goes and who the
beneficiaries are.
Researchers- The pieces of information in this study will benefit the
researchers that they have gathered can be more knowledgeable to them about the
TRAIN Law of the country that they can use in the future.
Future Researchers- The observations introduced in this study can utilize as
reference data in leading new explores and in testing the legitimacy of other related
13
investigates regarding RA No. 10963 (Tax Reform for Acceleration and Inclusion
Law), and this will fill in as a guide for adding new information to their study.
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DEFINITION OF TERMS
Important terms used in the study where operationally and conceptually
defined as follows:
Effects - This refers to an outcome of the action.
Lifestyle - is a way of life that typically reflects an individual. It is also the living
conditions, behavior and habits that are typical of them.
Lower Income Class - It refers to a Filipino resident who is commonly exempted
from tax as their income is lower than ₱250,000.
Middle Income Class - It refers to a Filipino resident that has a stable job and earns
enough for themselves and their families. They are between in poor and rich
individuals.
Take Home Pay - it is the difference between the gross income less all deductions of
taxes and other obligations. It is the net amount of income received after the
deductions from a paycheck.
Tax - It refers to the sum of money that the public authority imposes on its individuals
and properties for the public relations projects for the country.
Comprehensive- it provides a complete and comprehensive range of reform packages
aimed at building a more progressive tax system that is economically efficient and
socially fair.
Upper Income Class - It refers to a Filipino resident who earns for about six digits or
more per month.

CHAPTER 2
This chapter contains pieces of information about related studies about RA.
No 10963 (Tax Reform for Acceleration and Inclusion Law) relates to lifestyle, take-
home pay, and understandability of upper, middle, and lower-income classes.
REVIEW OF RELATED LITERATURE
2.1 RELATION OF MARLOW’S HIERARCHY OF NEEDS TO TRAIN LAW
In community development, Abraham Maslow's hierarchy of needs and
assessment of needs are used. Abraham Maslow, a renowned researcher in the field of
human needs and motivation, proposed that people are motivated by five levels of
needs: (1) physiological needs (2) safety needs (3) love and belonging needs (4)
esteem and prestige needs (5) self-actualization needs in his famous hierarchy of
needs theory. Abraham Maslow's hierarchy of needs was later expanded to include
two additional categories of requirements: (6) Understanding needs and (7) Aesthetic
needs. The focus of Abraham Maslow's hierarchy of needs is now on the motivation
of people in the human environment by seven (7) levels of needs. The importance of
Abraham Maslow's hierarchy of needs is that certain basic wants must be addressed
before other demands in the human environment can be considered. The human urge
to treat people's wants in order to better their living situations in the human
environment is further explored in Abraham Maslow's hierarchy of needs. In society,
no one is an island unto himself. To promote happy human coexistence in varied
social circumstances, love-based social groups, relationships, affiliations, and
belongings are required. This provides people the bravery and confidence to help
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grow their communities and better their living conditions (Dr. E. O. Aruma &
Dr. Melvins Enwuvesi Hanachor, December 2017).
Tax Reform and Inclusion (TRAIN) consists of revisions to the National
Internal Revenue Code of 1997 or the Tax Code. This reform includes packages that
make changes in the taxation concerning the personal income tax (PIT), estate tax,
donor tax, value added tax (VAT), documentary stamp tax (DST) and the excise tax
of petroleum products, automobiles, sweetened beverages, cosmetic surgery and
aesthetic procedure, coal and tobacco (Pinoymoneytalk, 2018) and removes the tax
exemption of Lotto and other PCSO winnings amounting to more than P10,000
(Gialogo, 2018).
One of the problems in Philippine taxation is the high rate of income tax and
indirect tax. In the year 2017, it became one of the highest income tax rates in
Southeast Asia (Punongbayan, 2017). According to former Undersecretary Jeremias
Paul Jr, 45% of the total tax revenue from 2000 – 2010 came from income taxes,
25.80% came from value-added tax (VAT), 10.45% came from excise taxes. High
VAT in the Philippines is not an isolated case. Some studies show that most third
world countries rely on high indirect taxes like VAT to increase revenue – which falls
on all consumers.
In addition, organizations such as the International Monetary Fund had a hand
in the persistence of this situation in developing countries. It tended to prioritize
revenue over equity. Meanwhile, welfare programs that primarily transferred more
cash to the poorest of the citizens represent a considerably smaller part of government
spending. The lower classes would suffer more from this ordeal if the government
17
continues to rely on higher indirect taxes. High income tax is another reason foreign
investors pass up on the opportunity to invest in these countries and prefer to do
business with low-tax countries. In addition to that, Philippine income tax rates
contradict the principle of taxation. Stated in the principle is that a good tax system
ensures that income tax rates is not raised too high, which will in turn discourage
economic activity. Another problem that can be observed is the excessive amount of
goods and services which are exempted from taxes. Philippine value-added tax (VAT)
law contains 59 lines of exemption (Punongbayan, 2017), likely explaining the
relatively low tax revenues that are collected.
2.2 WHAT IS SOCIAL CLASSES?
As stated by (Cole, 2019) The term "social class" is often used
interchangeably with SES, both by the general public and by sociologists alike. Very
often when you hear it used, that is what it means. In a technical sense, however,
social class is used to refer specifically to the characteristics that are less likely to
change, or harder to change, than one's economic status, which is potentially
changeable over time. In such a case, social class refers to the socio-cultural aspects
of one's life, namely the traits, behaviors, knowledge, and lifestyle that one is
socialized into by one's family. This is why class descriptors like "lower," "working,"
"upper," or "high" can have social as well as economic implications for how we
understand the person described. According to Revise Sociology, social Class refers
to divisions in society based on economic and social status. People in the same social
class typically share a similar level of wealth, educational achievement, type of job
and income.
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The latest Family Income and Expenditure Survey by the Philippine Statistics
Authority (PSA) shows that majority (58.4%) of Filipinos belong to the low-income
class, while the middle class comprises around 40% of the population. Only 1.4% fall
in the high-income class. The Philippine Institute for Development Studies (PIDS),
the government’s socio-economic policy think tank, notes that the low-income class
has a bigger share of the population because they tend to have larger families than
other social classes. The middle class is further classified into lower, middle, and
upper middle-income classes. In between the poor and the middle class is another
social class called the low-income class—they’re not middle class but not considered
poor. And then there’s the upper-income class in between the middle class and the
rich. Although people in this social class make six-digit figures monthly, they’re not
considered among the elite group of the wealthiest in the Philippines.
2.3 EFFECTS OF TRAIN LAW TOWARDS UPPER INCOME CLASS
The rich and other higher income groups will have larger take home pay than
previously estimated under the new tax law, while the poor will still bear the brunt of
paying higher taxes, said research group IBON. IBON said that the highest earning
40% or about 9.1 million households will have even more money in their pockets
under the recently passed Tax Reform For Acceleration and Inclusion (TRAIN) Law
compared to the original Department of Finance (DOF) proposal. Using July 2017
data from the DOF on the first year impact of TRAIN, IBON previously estimated
that the richest 10% earning an average of Php115,428 monthly will have an
additional Php33,795 annually. But IBON’s computations based on the latest
December 2017 DOF data shows that the richest 10%, now estimated by the DOF to
19
be earning an average of Php104,170 monthly, will have an additional Php90,793
annually. This includes how a chief executive officer (CEO) among the top 0.1% of
families already earning Php494,471 monthly will take home an extra Php88,568
annually. This is a reversal of the previous estimate that a CEO among the top 0.1%
earning Php706,017 would lose Php20,694, said the group. Middle income and lower-
middle families meanwhile take home an additional Php7,880 to Php24,343 under
TRAIN.
According to IBON Foundation (2017), it is evident that the tax program law
has “regressiveness and anti-poor character” wherein the rich benefit while the poor
suffer. First, the poor majority of Filipinos who earn not more than P15,000 per
month are burdened by higher taxes and thus higher costs of transportation, sweetened
beverages, and other goods. Second, even though the law includes short-term
unconditional cash transfers for 10 million poor families worth P200 per month in
2018 (P300 for 2019 and 2020), these are not enough. Third, the richest 1% of the
population, or those who earn P150,000 to more than P7,000,000 monthly would
enjoy the tax cuts and still be able to sustain their luxurious lifestyles and standard of
living despite the levy of high taxes on several goods and services. Lastly, even
though the government affirmed that the “Build, Build, Build” program, which would
be partly funded by the TRAIN Law, would be beneficial to the poor, the
infrastructure projects under this said program are “concentrated in the country’s
high-income regions”, particularly in the National Capital Region, Southern Tagalog,
and Central Luzon, and not in the poorer parts of the country.
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IBON Foundation (2017) further explained that the tax reform law would be
beneficial only to the rich but detrimental to the poor. Thus, IBON asserted that real
tax reform must involve the reduction of consumption taxes, the increase of the taxes
of those who belong in the high-income brackets, and the specific allocation of tax
revenues to certain social and economic services. In other words, the government’s
initiatives must focus on the “people’s welfare and national development over elite
interests.”
2.4 EFFECTS OF TRAIN LAW TOWARDS MIDDLE INCOME CLASS
Punongbayan (2018) stated that out of this law, the middle class will benefit
the most and the poorer, the least. The elites, being the 1% of the population, will
suffer a sizable reduction. Furthermore, it was mentioned above that the TRAIN Law
levied more and new excise taxes on petroleum products and on sweetened-beverages.
Logically, this will decrease everyone’s income, given that everyone is a consumer.
Punongbayan (2018) reiterates that the reduction will significantly be proportionate
when it affects the well-off, but will not exceed 1% of their annual incomes.
Most of those who belong to the middle class should feel considerable relief
from being overburdened by taxes, and if they invest a portion of their take-home pay
for entrepreneurship, then they could also contribute to the country’s economic
growth (Mendoza & Cruz, 2018; Diokno, 2018).
Low and middle-income households consume a much greater share of their
income than high-income households (Burman; Beltran & Litonjua, 2018). In the
United States, the prevalence of progressive income and estate tax systems, as Piketty
21
and Saez, point out, has prevented a rapid recovery of wealth inequality following the
Great Depression and WWII. Indeed, when it comes to taxation and inequality. Saez,
concludes that direct and progressive taxation, both short and long term, is necessary
for the distribution. In comparison, Denvil and Peter (2016) concur with Saez. The
authors discovered a positive association between increased tax progressivity and
lower-income inequality by analyzing the effects of progressivity adjustments in
income tax structures and the effect of those changes on income inequality degrees. In
addition, Brys et al. (2016) stress the importance of assessing the overall tax system
for productivity and equity effects in order to encourage sustainable economic
development. The authors (Alvez & Alfonso, 2019) emphasize the need for higher tax
progressivity and stimulate higher productivity in tax administrations, among other
items, to reduce the trade-off between efficiency and equity targets. Due to the higher
progressivity of income taxes as opposed to other tax sources, Johansson (2016)
demonstrates that shiftingtaxes from income to consumption taxes reduces inequality;
however, indirect taxes are less detrimental to development than income taxes.
2.5 EFFECTS OF TRAIN LAW TOWARDS LOWER INCOME CLASS
According to Inchauste & Lustig (2017), which emphasizes determining the
different impacts and inequalities of Middle- class specifically the Low- income class
families from the government implemented policy in promoting growth, widening of
opportunities to cater the needs of the citizen, and minimizing poverty with the help
of the implemented plans.
A previous study conducted by Jason Furman, entitled “Tax reform and
poverty” states that the tax system has a big impact on poverty, as it affects the
22
incentives for economic decisions like working and saving, and more particularly in
the distribution of the funds for the improvement of the society. Any form of a
reduction in taxes has to undergo through tradeoff like moderate-income families and
any means of- tested program. A higher subsidiary rate results to a well-targeted cost-
effective plan as it remove tax cuts/ transfer. The government presented an alternative
approach so that the inconsiderable rates. The government offered an alternative
method so that the minor rates that are entrenched in the tax and transfer systems
would be reduced. For lower-income families, this approach would do a little help.
The taxes would probably lessen, while the transfers for lower-income families would
increase without increasing insignificant rates. The alternative approach that was
presented is very poorly targeted and expensive.
Many employees are earning compensation income now, like immunity from
revenue enhancement, so long as their income does not increase to P250,000 or
approximately P20,833.33 a month (Bayod, 2021). Under Philippine law, the
minimum wage earners earn within this income bracket. Under the 2012 family
Income and expenditure (FIES), those who made this income story are considered
low-income earners but not weak. The per capita income between the poverty
demarcation and twice the poverty cable (Bonghanoy, Bueno 2019). Enactments
relating to the increase in the people's purchasing capacity decrease in the personal
income tax. However, the undesirable effect relates to the feeling of a stable and even
worse living situation since the increase in income is countered by the increases in the
prices of the goods and services, including the essential items (Bonghanoy, Etcuban,
Bueno, Medio, Capuno, & Capuyan, 2019).

23
Increasing revenues from this law will affect low-income families. Finance
Secretary Carlos Dominguez III overhauled its outdated tax system to make it simpler
and fairer. More efficient via the enactment of the Tax Reform for Acceleration and
Inclusion Act (TRAIN) starting this year and the funding support for education and
infrastructure modernization are among the most significant achievements of
President Duterte in 2017 (Tax Reform Department of Finance, 2018).
Abrea Consulting Group founder Raymond Abrea agreed that the “real big
winners” are those who earn an income of P250,000 or less per year since they are not
subject to personal income tax. On the other hand, those with an income of P8 million
per annum are imposed with a 35% income tax rate per year. But then, everyone,
especially the poor, would be hit by higher prices of goods and services. However,
Abrea claimed that everyone must “endure some sacrifices to make the system work”
(“Winners and losers,” 2017).
2.6 PERCEIVED EFFECTS OF TRAIN LAW
According to the Department of Economics of Xavier University - Ateneo de
Cagayan interviewed Dr. Philip Arnold P. Tuaño last 2019 on the effects of the Tax
Reform for Acceleration and Inclusion Act or commonly known as TRAIN Law on
various industries and social classes. Dr. Philip Arnold P. Tuaño pointed out a number
of positive effects TRAIN law may provide to our economy, namely, helping elevate
the middle class, while potentially enabling both universal health care program in the
Philippines and the greater unconditional cash transfer funds to poor income
households. Department of Trade and Industry’s Almer Masillones explained the

24
benefits of taxes to the audience: “We pay taxes because those are used to fund
provisions of public goods and services that benefit the general welfare of the people.
This includes national defense, administration of justice, internal security, the
conduct of foreign policy, infrastructure, and fund programs implemented by the
government. Another reason for taxation is to approach a 'more equal' society. One of
the ways to redistribute wealth is with tax policy.” Masillones emphasized that taxes
have the ability "to curb badly behaving companies." She said: “Another reason for
paying taxes is to correct for harmful behaviors that affect many people. This refers to
negative externalities. Imposing taxes on [harmful] activities can correct for negative
effects on some economic activities. We pay taxes to finance projects for the common
welfare, to approach a fairer society and to correct to harmful activities.” (Dosdos,
2019)
Under the TRAIN Law, more Filipinos dragged into poverty by higher taxes.
(Ben O. De Vera, 2019). “The results show that although excise taxes on fuel
products entailed minimal increase in poverty incidence, the first package of TRAIN
increased poverty among households and individuals and across all sectors
considered. This was due to the increase in commodity prices that offset the increase
in factor incomes,” according to researchers Czar Joseph Castillo, Ramon Clarete,
Marjorie Muyrong, and Philip Tuaño in a report titled “Impacts of TRAIN fuel excise
taxes on employment and poverty.”
According to an article of "Positive and Negative Effects of Train Law"
(2019) there are some positive outcome of train law that benefitted filipinos through
their yearly tax returns, enhaned wages, stock options, bonuses, reduced utility bills,
25
etc. In addition, it rationalized tax bracket system, simplified tax reform system,
improve tax collection efficiency, and provide better services and facilities. On the
other hand there are also some negative effects such as increase in inflation, worsen
poverty, income inequality, and higher revenue losses.
2.7 TAKE HOME PAY
Based on a study by the University of Mindanao – Institute of Popular
Opinion, younger workers aged 18-29 were found to be “strongly in favor” of the
TRAIN Law. This study, which was conducted from January to February 2018,
revealed that among the 1,200 people from three Congressional districts in Davao
who participated, many younger workers believed that they will reap long-term
benefits from the TRAIN Law, despite feeling the impact of the tax reform law,
particularly the increase in the prices of several goods (62%), the increase in their
take-home pay (23%), and the impact of the law on the prices of gas and oil (16%)
(Petalcorin, 2018).
In the Philippines, income is a major contributor to economic growth, and last
December 19, 2017, President Rodrigo Roa Duterte signed into law the Tax Reform
for Acceleration and Inclusion (TRAIN) as Republic Act No. 10963. The reduction in
personal income tax, which results in higher take-home pay and additional
opportunities to save, is one of the most well-publicized aspects of the TRAIN
legislation. According to Dizon (2021), a fiscal policy can be eficient in terms of
reducing economic distortions and fostering economic growth, but it can also be
fundamentally unequal in terms of income allocation. Under the TRAIN law, income
for all classes increased to reduce poverty and promote economic development
26
(Bonghanoy et al, 2019). This trade-off has long been a source of debate in the search
for the perfect taxation theory. As stated by (Amir et al, 2013), income disparity rises
as a result of policies like lowering the marginal tax rate on personal income tax and
introducing a flat tax rate on corporate income tax, which benefits households with
the highest income brackets the most.
Since the implementation of the TRAIN law, consumers have been unable to
enjoy any of their high take-home pay due to high inflation, which took a toll on their
finances. According to the study of Avila and Gatpolintan (2019), due to inflation in
the Philippines, escalation of household and personal spending, replacement of
priorities, reduction of the quantity of consumption, involvement in part-time
employment and other income-generating activities, awareness of fewer savings, and
incurrence of loans and borrowingswere among the adjustments in budget
consumption and decisions. However, according to the empirical result of the study
by Ichiue & Nishiguchi, higher inflation expectations tend to result in greater current
household spending. This suggestion is supported by the findings of Hausman and
Wieland, stating that inflation and consumer expenditure have a positive relationshp.
The Department of Finance (2017h) added that 99% of the country’s taxpayers
will get to have a higher take-home pay. However, Alan Tanjusay, the spokesperson
of the Associated Labor Union – Trade Union Congress of the Philippines (ALU-
TUCP), asserted that employees with taxable income are the only ones who have the
upper hand with the implementation of the TRAIN Law (Medenilla, 2017). Given the
increase in the people’s disposable income, consumption will spur.

27
However, according to Manasan (2017) study about the Tax Reform Law,
despite its attempts to transform the tax system,the Philippines has a lower rate of
revenue return than its ASEAN neighbours. For low and middle-income families, the
tax structure is a mixed bag (Burman; Newman & O'Brien). As a result of moving so
much economic assistance into the tax system, tax reform will result in a significant
reduction in income assistance for low and middle-income families. Because of the
reduced personal income tax brought by TRAIN policy, most taxpayers, particularly
low and middle-income earners' take-home pay, would be substantially increased.
However, except for high-income earners, those with low and middle income are now
burdened by a rise in the excise tax and the cost of basic goods (Burns & reside, 2016;
Pregoner et al., 2020). Similarly, in the US, Trump's proposed and enacted individual
and corporate tax cuts lower tax burdens for all families but disproportionately
support those in the top percentile.This policy aggravates income inequalities which
are still apparent in the Philippines (Morgan, Trinh, et al., 2021).
2.8 LIFESTYLE
When TRAIN Law implemented, it reduced personal income taxes but
increased those on cars, tobacco, sugar sweetened beverages, and fuel. To reflect with
the new withholding tax rates, payroll managers adjusted their system in
supermarkets, oil retailers, convenience stores, and even sidewalk vendors have begun
uodating their price list. By mid - January in year 2018, motorist will also have to
brace for higher fuel prices, once existing petroleum stocks of retailers are used up.
The higher fuel prices will also have a trickle down effect on public transportation
services providers that will really affect the consumers, which have started seeking
28
fare hikes. (Rappler, 2018) Some people who feel the Trickle-down effect will save
money because of the new withholding tax rates. Just like Agapito, who earns
P30,000 monthly, will save P3,438 a month. He said he decided to stick to his old
Toyota Vios instead of upgrading to a new car, given the hike in auto excise tax,
which mainly hit mass market vehicles."I don't think TRAIN will provide significant
impact to an average wage earner. It is like the government is just giving us a new
perspective to look at our taxes. You have higher pay, but electricity, transport,
grocery bills will also be higher," (Agapito, 2018)
While the TRAIN directly affected the power distributor, oil companies, fuel
retailers, and tobacco manufacturers. First Metro Investments Corporation vice
president Cristina Ulang said they have one thing going for them. "The additional
burden is something they can pass on to consumers" (Ulang, 2018). This,
however,does not hold true for small-time vendors in the Philippines, like Meanne
Reyes who has two kids. She sells sugar-sweetened drinks, snacks,and tobacco along
Pasig City, she said she has fewer stocks due to TRAIN Law."Marlboro used to be P5
per stick. Now I’m selling it for P7 each. Since an entire pack is now more expensive,
I was forced to buy fewer supplies. The price hike is significant. What will happen to
people like me who have no fixed income and depend on sidewalk vending to earn a
living?" (Reyes, 2018).

29
2.9 COMPREHENSIVE
The TRAIN will provide hefty income tax cuts for the majority of Filipino
taxpayers while raising additional funds to help support the government’s accelerated
spending on its “Build, Build, Build” and social services programs.This tax reform
package corrects a longstanding inequity of the tax system by reducing personal
income taxes for 99 percent of taxpayers, thereby giving them the much-needed relief
after 20 years of non-adjustment of the tax rates and brackets. This is the biggest
Christmas and New Year gift the government is giving to the people. For the poorest
10 million households, the government is giving them targeted cash transfers of PHP
200 per month in 2018 and P300 per month in 2019 and 2020, sourced from higher
consumption taxes that the rich will contribute, as well as better social services,
healthcare, and education. All these will prepare the people for better job
opportunities. The TRAIN raises significant revenues to support the President’s
priority social and infrastructure programs, which will help realize his
administration’s goal of reducing the poverty rate from 21.6 to 14 percent by 2022.
Some 70 percent of the incremental revenues will help fund the government’s
infrastructure modernization program, while the balance will go to social services.
Starting in 2018, the government expects to raise funds equivalent to about two-thirds
of the incremental revenues targeted under this tax reform law. Congress has
committed to passing the rest of the TRAIN’s provisions representing the remaining
one-third of the targeted revenues in early 2018 to help us achieve our revenue and
deficit targets.With the people’s support and understanding, all these reforms will
result in more and better jobs, lower prices, and a brighter future for every Filipino.
30
The Philippines’ tax system suffers from chronic weaknesses. Tax rates
continue to be high, thus, discouraging investments. Tax effort levels are low and
there are persistent calls to reduce personal and corporate tax rates to levels more
consistent with comparable nations. Administrative efficiency is also low and tax
leakages are high. Tax reforms were dictated by fiscal constraints in the aftermath of
presidential transition in need of finances for new programs. Tax reform has been
rationalized in the past as basis for achieving the economic and political motives of
policymakers and legislators, to enhance equity, efficiency, and simplicity of the tax
system (Reside and Burns, August 2016).
TRAIN is the first of five packages of the comprehensive tax reform program.
Other packages deal with corporate income taxation and modernizing fiscal
incentives; sustainable financing for Universal Health Care through increased sin
taxes on tobacco and alcohol; fixing our broken property valuation system; and
reforming capital income taxation. The program has always been presented by the
government’s economic team as not an end in themselves, but means of making the
tax system one in which everyone contributes her or his fair share of our investments
in infrastructure and human development. All packages seek a fairer, simpler and
more efficient system, while only two are also revenue enhancing, TRAIN and the sin
tax package for the long-term financing of Universal Health Care.

31
2.10 INDEPENDENT TO DEPENDENT VARIABLE
Department of Health Undersecretary Dr. Lilibeth David added that the
TRAIN Law is a set of “healthy policies” for the environment (Department of
Finance, 2018). The law levied taxes on goods that yield “socially undesirable
effects”: petroleum products contribute to pollution, automobiles play a part in traffic
congestion and pollution, and cigarettes and sugar-sweetened beverages cause several
health problems (Punongbayan, 2018). On the other hand, despite the tax cuts from
the people’s personal income, the TRAIN Law has been criticized for burdening all
consumers because of higher prices in certain goods and services as the law was not
limited to providing tax exemptions and reducing tax rates. It also included revenue
measures that raises duties on fuel, cars, coal and sugar-sweetened drinks.
As of now, the TRAIN law is powerful, and pay workers are now
encountering the advantages of increasing take-home pay. In contrast, the poorest of
the poor, who are also non-wage earners, have already received the unconditional
cash transfer, which will assist them in the price increase—giving the notion that the
Philippine Government is doing what it can to provide and help individuals from
marginalized groups and below the poverty line (Suan, 2021).
According to DOF, all income-earning households from the richest to the
poorest, will benefit from the benefit from the adjusted PIT rates. Its projection for
fiscal year 2018 indicates that the poorest 60% of families in terms of capita income
with some 60 million Filipinos gain from the proposed adjustments. Based on its
estimates, the poorest 2.3 million families with an average monthly income of Php
5,106 (first income decile) will gain an additional annual take-home pay of Php 2 in
32
2018; the next poorest 2.7 million families with monthly income of Php 8,250 (second
income decile) will gain an additional Php 84; the next poorest 2.7 million families
with monthly income of Php 10,652 (third income decile) will gain an additional Php
404; the next poorest 2.7 million families with monthly income of Php 12,987(fourth
income decile) will gain an additional Php 1,063; the next poorest 2.7 million families
of Php 15,760 (fifth income decile) will gain an additional monthly income of Php
2,377; and the next poorest 2.7 million with monthly income of Php 19,335 (sixth
income decile) will gain an additional Php 4,127. IBON, however, points out that the
estimates of PIT gains for the poorest 60% Filipinos as presented erroneously that the
poorest Filipino currently pay income tax. This is untrue because the BIR’s 2013
dataset on taxpayers, which is based on the alpha list of payees on income payments
subject to withholding taxes, indicates only some 5.6 million taxpayers who are
wholly form the highest income bracket. The poorest 60% Filipinos –majority of
whom are minimum or below minimum wage earners, and workers from the informal
sector do not pay income tax now. Hence contrary to the DOF’s claims, they have
nothing to gain from the income tax reforms. (TRAIN: Relieving the rich, burdening
the poor, 2017).
“The poor and middle class, even those few with gains from personal income
tax cuts, will suffer cuts in their standard of living unlike the rich who will easily be
able to maintain their lifestyles,” IBON Foundation said as reported by CNN
Philippines. This goes against the claim of the Department of Finance (DOF) stating
that the tax reform is not “anti-poor.” The countryâ€™s finance department claimed
that the top 10 percent of richest households consume as much fuel as the poorest 80
33
percent combined which is at about 51 percent. The DOF added that based on the
Family Income and Expenditure Survey (FIES) 2015, the top 1 percent uses oil
equivalent to the bottom 50 percent of all households in the entire country. IBON
Foundation criticized the logic of the said argument, labeling it as “insensitive” to the
actual income of a Filipino family. The study reported that the poorest 80 percent has
a monthly income ranging from P1,441 to around P29,600. As such, around 18.1
million families would belong to the country’s poor. While 2.1 million would belong
to the lower middle class. IBON reported that the “richest 10 percent” would include
middle-class families earning between P44,000 and P100,000, which means they are
part of the group which consumes 51 percent of the total fuel consumption. The
research group added the “TRAIN-driven” inflation affected the purchasing power of
the poorest 90 percent of Filipinos by P1,622 to P9,250. The said foundation then
suggested that taxation should be directed towards the country’s richest.

34
SYNTHESIS
Tax Reform for Acceleration and Inclusion Law (TRAIN) had a big impact on
the consumption of the consumers because of the new excise taxes on petroleum
products, automobiles, sweetened beverages, cosmetic surgery, aesthetic procedure,
coal, and tobacco (Department of Finance, 2018). On the other hand, lower-income
classes are exempted from the personal income tax if they earn below ₱250,000
annually or approximately ₱20,833 a month (Bayod, 2021). Because of the adjusted
personal income tax employees benefit the most from having a higher take-home pay
during train law since the deductions were lessened. Furthermore, the middle-income
class will benefit the most as they have enough income to sustain their needs and buy
their wants by paying small deductions or withholding tax and the lower-income class
is the least in adopting the benefits due to the higher price of commodities. However,
the elites being 1% of the total population will suffer an enormous deduction
(Punongbayan, 2018). TRAIN Law aims to lower income tax to improve the buying
power of the consumers that will benefit the economy. In contrast, the price increase
of products affected by excise taxes had multiple effects on the Filipinos. Higher fuel
price affects the public transportation services and it results in fare hikes to its
commuters (Rappler, 2018). Also, LPG was also affected that causes an additional
cost to an individual. According to Department of Health Undersecretary Dr. Lilibeth
David, TRAIN Law is a set of "healthy policies" for the environment. This law
provided excise taxes on petroleum products that contribute pollution, automobiles
that caused traffic congestion and sweetened beverages and tobacco for health
problems (Punongbayan, 2018).

CHAPTER 3
METHODOLOGY
This chapter shows all the important pieces of information about the intended
process of this study. These include the research design, research locale, population
and sampling, research instrument, validation of the instrument, data gathering
procedures, ethical consideration, and treatment of quantitative data to be used and
discussed in conducting the study.
RESEARCH DESIGN
This study is a quantitative type of research and the researchers decided to
utilize the descriptive correlational method to identify the relationship between the
level of perceived effects of train law in different social classes in Cabuyao, Laguna.
As stated by Cresswell, correlational research designs are used by the researchers to
describe and measure the degree of relationship between two or more variables.
Moreover, the procedure in which subjects' scores on two variables are simply
measured without manipulation in able to determine if there is a relationship.
RESEARCH LOCALE
Research locale refers to the setting or place of the research study. The study
was conducted in Cabuyao, Laguna where the researchers are currently resided.
36
POPULATION AND SAMPLING
This study utilized stratified random sampling. Bruce Frey (2018) cited that
stratified random sampling is a method for testing a population by which the
population is partitioned into subgroups and units randomly selected from the
subgroups. This method was also used to strengthen the effectiveness of the study and
plan concerning overview expenses and accuracy. There are three classifications of
social classes, the upper, middle, and lower-income classes. Raosoft was used to
distinguish the number of respondents. The population is 345,623 respondents with a
confidence level of 95%, a response distribution of 50%, and a margin of error of 5%.
There are 384 respondents of Cabuyao, Laguna which is 0.11% of the total
population.
RESEARCH INSTRUMENT
The researchers utilized a researcher-made questionnaire as an instrument for
this study. The researcher-made questionnaire is a set of deliberately organized
questions intended to gather pieces of information and data required for this research
study. To gather the data needed, the researchers will have a survey questionnaire that
composed of three parts. In part 1, the researchers will be asking about the profile of
the respondents. It will determine the name, age, gender, and occupation. Part 2 will
determine their social class based on their salary range monthly. Part 3 will determine
the effects of TRAIN Law in terms of take-home pay, lifestyle, and comprehensive of
selected social classes of Cabuyao, Laguna.

37
The researchers utilized the Likert Scale to acquire the response of the
respondents for simpler assessment and administration of the survey questionnaires.
Categorial response for the Level of Preceived effects of TRAIN Law
Social Classes Salary Range Categorial Response
Upper-Income Class Above P76,669 Strongly Agree
Middle-Income Class P 21,194- P76,669 Agree
Lower-Income Class Below P21,194 Disagree
Strongly Disagree
VALIDATION OF THE INSTRUMENT
The research instrument is presented to the research adviser for furthermore
remarks and reviews. This instrument has been validated with the assistance of
professionals and experts in the scope of the research to validate the instrument. The
professionals and experts have consisted of three certified public accountants. Some
informations were removed or included to follow acoordingly to the accepted
standards.
38
DATA GATHERING PROCEDURES
The researchers consider the steps to acquire the needed data to accomplish
the study. A request letter was sent to Cabuyao City Hall after the approval of the
research proposal to determine the total population of 345,623. They used the sample
size calculator to estimate the total respondents of 384 and conduct the study
regarding to perceived effects of train law on selected social classes. The researchers
made a survey questionnaire according to the statement of the problem and distribute
to its respondents using the google form. All data and information gathered were
classified, organized, analyzed, interpreted, and presented in textual and tabular
forms. Furthermore, the result of the survey was consulted to the statistician for the
quantitative treatment of the collected data.
ETHICAL CONSIDERATION
In this study, different social classes in Cabuyao, Laguna were the target
respondents to answer the questionnaires. Thus, most of them participated voluntarily
and with consent. The confidentiality of the information regarding their name or
status in life was ensured since it will never be disclosed to anyone. All information
gathered was strictly confidential and only used for the purpose of the study.
39
TREATMENT OF QUANTITATIVE DATA
The following will be used as the statistical treatment of data enforced in the
research study:
1. To describe the level of perceived effects of train law assessed by the selected
social classes in terms of lifestyle, take-home pay, and understandability. The mean
and Likert scale will be utilize to the data gathered.
2. Simple T-test was used to determine the significant difference between the
perceived effects of train law by the selected social classes and by the lawmakers.
40
SURVEY QUESTIONNAIRE
Respondent’s Profile
Name (Optional):
Occupation:
Social Class Salary Range (Monthly)
Upper-Income Class Above P76,669
Middle-Income Class P 21,194- P76,669
Lower-Income Class Below P21,194
Part I: Statements below pertains to the measurement of the level of Perceived Effects
of RA. No. 10963 (Tax Reform for Acceleration and Inclusion) Law in terms of Take-
home pay, Lifestyle and Comprehensive.
Instruction: Please read the following statements below, using the rating scale below,
put a check that corresponds your answer.
4 – Strongly Agree 3 – Agree 2 – Disagree 1 – Strongly Disagree
A. TAKE HOME PAY 4 3 2 1

1 The amount of take-home pay increased during the
implementation of TRAIN Law.
41
2 The increased of my take-home pay gives me benefits to buy

my necessities.
Due to higher excise taxes, it offset the increase in take-home

pay.
3
4 My take home pay during the implementation of TRAIN Law

is enough to budget our needs,wants and other bills.
5 I prefer lower take home pay and low price of necessities than
higher take home pay and high price of necessities.
My take home pay is not enough so I have to borrow from

lenders and banks.
6
I am able to buy my wants, cravings, or desires with my take-

7 home pay.
I am able to enjoy my 13th month pay and bonuses without

8 any deductions or taxes.
9 I don’t have any debts or loans since the implementation of

TRAIN Law due to increased of my take home pay.
I received a much higher incentives and commissions under

10 TRAIN Law.
Many jobs are available and fair minimum wage for us in the
lower-income class due to the TRAIN Law.
11
12 I don't need to have another job because I earn enough money

from my job and it can sustain our daily living.
42
I can still save money even though the price of goods and
utility bills are high.
13
My earnings can sustain the needs of my family.

14
I am in favor of TRAIN Law since it increased my take-home

15 pay.
B. LIFESTYLE 4 3 2 1
1 My purchasing power affects in buying of important goods
during the implementation of TRAIN Law.
43
2 I can not buy a lot of drinks (juices, soft drinks) with the
implementation of excise tax.
Public transportation fee has increased and lessened my buying

power.
3
4 The important goods are now more expensive.
5 With the higher excise taxes on sugar-sweetened beverages, I

limit drinking coke, juices, etc.
Due to higher excise taxes, all price of basic commodities were

affected.
6
I seldom go out if i won't be in an important errands because of

7
the high transportion cost.
Every time I cooked dishes, I make sure to conserve LPG gas

8 because of the expensive price of gas.
9 I limit the groceries I bought every week.
I limit buying instant coffee every morning to save my money.

10
This law only became a burden and made our daily lives even
more difficult due to the high prices of commodities and other
11 bills for us in the lower-income class.
Our lifestyle has improved because of the help of the TRAIN

law.
12
44
C. COMPREHENSIVE 4 3 2 1
1 I’m fully aware that TRAIN Law adjusts the personal income
taxes in different social classes and have impacts on
individuals like me.
45
2 Our tax system is improved and better compared to previous
tax system.
TRAIN Law affected the prices of basic commodities.

3
4 I have knowledge about TRAIN Law and the changes to taxes.
5 Our inflation rate has risen and those in the lower class have
been most affected.
TRAIN Law will eradicate the extreme poverty of the country.

6
TRAIN Law is more simpler, efficient and more fairer from

7
previous tax system.
The TRAIN Law is succesful for supporting the
8 Build,Build,Build Program of President Rodrigo Duterte
9 The disadvantage of TRAIN Law is the excise tax which

affects the transportation sector.
The electricity bills also increased to compensate for the excise

tax on coal and bunker fuel as to removal of VAT Exemption
10
for electricity transmission.
Since the implementation of TRAIN Law, there are many job
11 opportunities for Filipinos especially for lower to middle-

income class.
It decreased the taxes I paid and get more bonuses.

12
I’m in favor of TRAIN Law even if I pay high income tax and
VAT because it support the Build, Build, Build program of the
13
President Duterte that will benefit every Filipino.
46
REFERENCES
Tax changes you need to know (Republic Act No. 10963) Tax Reform for
Acceleration and Inclusion
Department of Finance, National Tax Research Center
https://ntrc.gov.ph/images/train/Tax-Changes-You-Need-to-Know-under-RA-
10963.pdf
EXPLAINER: How the tax reform law affects Filipino consumers
Chrisee Dela Paz, 2018
https://www.rappler.com/newsbreak/iq/193170-train-tax-reform-law-effects-filipino-
consumers-workers/
Abraham Maslow’s Hierarchy of Needs and Assessment of needs in community
development. Dr. Aruma, E.O. and Dr. Hanachor, M. 2017
https://www.eajournals.org/wp-content/uploads/Abraham-Maslow%E2%80%99s-
Hierarchy-of-Needs-and-Assessment-of-Needs-in-Community-Development.pdf
What is the Effect of Train Law on the Philippine Tax?
Rosben Orbeso Munillo, CPA, 2021
https://www.philippinetaxationguro.com/what-is-the-effect-of-train-law-on-the-
philippinetax/#:~:text=The%20effect%20of%20train%20law%20on%20the%20Philippine
%20Tax%20System,impact%20on%20our%20tax%20systems.&text=The%20other%20effects
%20of%20train,highest%20tax%20rates%20on%20cigarettes .
47
The Impact of Tax Reform for Acceleration and Inclusion (TRAIN) Law on Poor
Income Class Families: A Phenomenological Study.
Pregoner, J. M., Ebrahim, A., Mojares, E., & Montes, R. (2020, April 26).
https://edarxiv.org/k2n6r/
Effect of Tax Reform Acceleration Inclusion Law: To The Middle-Class Employees
in Cavite.
Mutia, Tilfemar, 2020
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3583317
Revisiting the TRAIN Law
Aleli Carissa D. Gimena, P&A Grant Thornton,2019
https://www.grantthornton.com.ph/insights/articles-and-updates1/lets-talk-tax/revisiting-
the-train-law/#:~:text=Although%20the%20individual%20income%20tax,a%20whopping
%20surge%20in%20inflation.&text=Although%20the%20causes%20include%20world,was
%20partly%20caused%20by%20TRAIN.
Tax Information
Bureau of Internal Revenue
https://www.bir.gov.ph/index.php/tax-information/excise-tax.html
Modernizing Public Transport in the Philippines.

48
Patricia Manalo
https://changing-transport.org/modernizing-public-transport-in-the-philippines/
Assessing The impacts of TRAIN Law on Consumption, Savings, and Unemployment
in the Philippines.
Frances Lorraine D. Feniz, Aira Kim M. Lim, Angela F. Munsayac, and Peter Jeff C.
Camaro, 2022
https://www.al-kindipublisher.com/index.php/jefas/article/view/2609/2329
TRAIN Crash: an analysis of TRAIN Law’s impact on the low and middle income
families of Barangay Cembo, Makati City.
Morales, Ruth Marie D. 2019
http://dspace.cas.upm.edu.ph/xmlui/handle/123456789/739
More Filipinos dragged into poverty by higher taxes under TRAIN.
Ben O. de Vera, 2019
https://business.inquirer.net/282231/more-filipinos-dragged-into-poverty-by-higher-
taxes-under-train/amp?fbclid=IwAR1ZLa29cvwbvNk8-
fFqc01nwq702FwYZEVv2Px-s24ypldUGzX260t0QC8
Positive And Negative Effects Of Train Law.

49
MyEssayBook-2019
https://myessaybook.com/positive-and-negative-effects-of-train-law/?
fbclid=IwAR1ZLa29cvwbvNk8-fFqc01nwq702FwYZEVv2Px-
s24ypldUGzX260t0QC8
Xavier Ateneo Economics hosts talk on effects of TRAIN Law
Joseph Mathieu J Dosdos - 17 October 2019
https://www.xu.edu.ph/cas-news-events/4256-macroeconomics-and-welfare-effects-
of-train-law
THE TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT.
dof.gov.ph – 2017
https://www.dof.gov.ph/ra-10963-train-law-and-veto-message-of-the-president/?
fbclid=IwAR1lMpgm7tKaGo9ocq0iHWk1lnCuL2A0RwXEqxU_Ihhrdn-
pjTBXa8WCaBM
TRAIN boosts Filipino consumers’ spending power, says Dominguez
Department of Finance-2019
https://www.dof.gov.ph/train-boosts-filipino-consumers-spending-power-says-
dominguez/
Who Are The Middle Class In The Philippines?

50
Marc Adrian - 2021
https://www.imoney.ph/articles/middle-class-sector-philippines/
Diokno sees unemployment decline amid TRAIN
Mary Grace Padin - 2018
https://www.pressreader.com/philippines/the-philippine-star/
20180215/282050507532639
CME conducts seminar on the TRAIN law
Merry Jean Caparas - 2018
https://www.vsu.edu.ph/articles/news/1497-cme-conducts-train-law-seminar
What Is Social Class, and Why Does it Matter?
Nicki Lisa Cole, Ph.D - 2019
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Social Class – An Introduction to the Concept
Karl Thompson - 2016
https://revisesociology.com/2016/08/04/social-class-definition-introduction/?
fbclid=IwAR0l_Rvzbh_bv9QMyzQTEOPiuRy4fI3bZC0AsJA1yWIhd2THEqRvRkJ
VCZM
Even more money for the rich under TRAIN law

51
IBON Foundation - 2018
https://www.ibon.org/even-more-money-for-the-rich-under-train-law-ibon/?
fbclid=IwAR2-JXnqA0x7gnDN-
yVDPZxz5x1xep1WoZdktfvadfKnqhnpQG71FG2t_mM
Understanding Social Class in the Philippines: Which Class Do You Belong to?
Venus Zoleta - 2022
https://www.moneymax.ph/personal-finance/articles/social-class-philippines?
fbclid=IwAR2zLlzfT68gWAG0Rleiu7oa8KihBDhIN4CB-
HVSWKBP0gG5myQ5c15x95Y#:~:text=Class%20Are%20You%3F-,Types%20of
%20Social%20Class%20in%20the%20Philippines,and%20the%20high%2Dincome
%20class
TRAIN Law Burdens Majority Of Filipino Families, Say Study
Asian Journal Press - 2018
https://www.asianjournal.com/philippines/across-the-islands/train-law-burdens-
majority-of-filipino-families-say-study/?
fbclid=IwAR1eYojRtsOCLLbtHBIy2hULEfftDdpSKaNP3uTb7BnAegyzOltcq2ZGL
2E
An Initial Look at the TRAIN Law: Are We on the Right Track?
Edwin P. Santiago - 2019
https://scholar.google.com/scholar?start=10&q=effects%20train
%20law&hl=en&as_sdt=0%2C5&fbclid=IwAR2Yry7rxI2nHCZfWSXrV4HgttKhhA
52
qDdE29uhlL1Lachaagabi5jMufnUM#d=gs_qabs&t=1650204256239&u=%23p
%3D1UnzWwkbETwJ
The Tax Reform for Acceleration and Inclusion (TRAIN) Act.
Department of finance-2017
https://taxreform.dof.gov.ph/news_and_updates/the-tax-reform-for-acceleration-and-
inclusiontrainact/#:~:text=THE%20TAX%20REFORM%20FOR
%20ACCELERATION%20AND%20INCLUSION%20(TRAIN)%20ACT.,-Date
%20Posted%20%3A%20December&text=President%20Rodrigo%20Roa%20Duterte
%20signed,19%2C%202017%2C%20in%20Malacanang.
Tax Reform for Acceleration and Inclusion (TRAIN)
Congressional Policy and Budget Research Department- 2017
https://cpbrd.congress.gov.ph/173-resources/for-legislators/17th-congress-legislative-
agenda-tracker/agenda-and-briefers/793-tax-reform-for-acceleration-and-inclusion-
train
Seeing the TRAIN Law in its proper perspective
Romeo L. Bernardo-2019
https://www.bworldonline.com/editors-picks/2019/05/13/230539/seeing-the-train-
law-in-its-proper-perspective/

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St.

Vincent College of Cabuyao

“PERCEIVED EFFECTS OF RA NO. 10963 (TAX REFORM FOR

Faculty of the College of International Business Studies

St. Vincent College of Cabuyao

of the requirements for the Degree

BACHELOR OF SCIENCE IN ACCOUNTANCY

LAWRENCE MAE L. GRAVADOR

This project feasibility study hereto entitled:

Prepared and submitted by Allexandra O. Macalinao, Aldrealin E. Panes

RICHARD PEREZ, CPA, MBA, CTT, MRITax

FRITZ PEREZ, CPA,CTT, MRITax, CEMP, MBA

FRITZ PEREZ, CPA, CTT, MRITax, CEMP, MBA

ADVISER’S ENDORSEMENT LETTER

Acceleration and Inclusion Law) of Selected Social Classes of Cabuyao,Laguna”,

prepared and submitted by, Allexandra O. Macalinao, Aldrealin E. Panes and

Lawrence Mae L. Gravador, In Partial Fulfillment of the Requirements for the

Degree of Bachelor of Science in Accountancy has been examined and recommend

for Oral Defense.

RICHARD PEREZ, CPA, MBA, CTT, MRITax

January 28, 2022

RICHARD PEREZ, CPA, MBA, CTT, MRITax

We, Allexandra O. Macalinao, Aldrealin E. Panes and Lawrence Mae L.

Your affirmative response and approval to this request will be whole-heartedly

CERTIFICATE OF GRAMMAR EDITING

This certifies that the Bachelor of Science in Accountancy study entitled

Law) of Selected Social Classes of Cabuyao,Laguna”, prepared and submitted by,

Allexandra O. Macalinao, Aldrealin E. Panes and Lawrence Mae L. Gravador, has

been subjected to Language Editing at St. Vincent College of Cabuyao, by the

This certifies that the Bachelor of Business Administration major in Marketing

Management feasibility study entitled “Percieved Effects of RA No. 10963 (Tax

Reform for Acceleration and Inclusion Law) of Selected Social Classes of

Cabuyao,Laguna”, prepared and submitted by, Allexandra O. Macalinao,

Aldrealin E. Panes and Lawrence Mae L. Gravador, has been subjected to

Financial Consultation at St. Vincent College of Cabuyao, by the undersigned.

We herby declare that the submission of this thesis entitled: “Percieved

Selected Social Classes of Cabuyao,Laguna” for the degree of Bachelor of Science

of our knowledge and belief. It contains no material previously published or written

Lawrence Mae L. Gravador

Adviser’s Endorsement III

Certificate of Originality VII

Table of Contents VIII

The Problem and Its Background 1

Statement of the Problem 8

Scope and Delimitation 11

Significance of the Study 12

Review of Related Literature 14

Relation of Marlow’s Hierarchy of Needs to TRAIN Law 14

What Is Social Class? 16

Effects of TRAIN Law towards Upper Income Class 17

Effects of TRAIN Law Towards Middle Income Class 19

Effects of TRAIN Law Towards Lower Income Class 20

Perceived Effects of TRAIN Law 22

Take Home Pay 24

Independent to Dependent Variables 30

Population And Sampling 35

Validation Of The Instrument 36

Date Gathering Procedures 37

Treatment Of Quantitative Data 38

of the problem, conceptual framework, hypothesis, scope and delimitations, the

significance of the study, and the definition of terms.

market costs. In like manner, development in remove appraisal of specific things,

similar to oil-based commodities, will prompt an augmentation not simply in the

things as midway commitments to their productions.