Boon or Bane:

An Analysis of the Impact of the

Tax Reform for Acceleration and Inclusion (TRAIN) Law
By Berna Grace Adame, Dayielle Menchie Fidel, John Maico Hernandez,
Patrick Mabbagu and Maria Susan Pascual

Aimed at addressing income inequality through a more progressive taxation system while ensuring
that the government has in its coffers enough funds for public sector services that include the
ambitious ‘Build, Build, Build’ infrastructure program, President Rodrigo Duterte signed Republic
Act No. 10963 on 19 December 2017. Specifically, the law which is the first package of the
Comprehensive Tax Reform Program espoused by the Department of Finance (DOF), seeks to
reduce personal income taxes and “impose higher excise taxes on automobiles, petroleum
products, tobacco and sugar-sweetened beverages and other non-essential goods”1.

Despite the much-touted goal of sustainably reducing poverty, however, the passage and
implementation of the TRAIN law was met with strong criticism and garnered plenty of fanfare
because of its seemingly negative consequences. The law was blamed for the economic woes that
Filipinos must endure as a result of the increase in the prices of consumer goods and fuel products.
Just few months after the said legislation was signed, the Duterte government was urged to
suspend the law to arrest the dissatisfaction of people from different sectors over TRAIN’s alleged
inflationary effect.

Now that the law is in its second year of implementation, the researchers, through this paper will
examine how the TRAIN law came to be, how it was implemented and the challenges confronting
its implementation. The researchers will then dissect its impact to both the economy and the
ordinary consumers using available data and related studies. The researchers will also find out
whether the government is really on the track of addressing income inequality as its foremost raison
d’etre. Towards the end and considering that TRAIN law affects everyone, the researchers will also
offer recommendations as to how the law and its implementation could be improved.

Adopting by reference the Prescribed General Outline for Policy Paper, the researchers will also lay down
the following:

I. Background of  Key government agencies involved

the Policy  Major objectives
II. Policy  Actors and activities
Implementation  Implementation progress
III. Policy Results  Outputs and outcomes
 Challenges
IV. Policy Results  What went right and went wrong
 Lessons learned

1 Gimena, Aleli Carissa D. (2019, January 14). Revisiting the TRAIN Law. Retrieved from
https://www.bworldonline.com/revisiting-the-train-law/

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