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EFFECTS OF TAX REFORM FOR ACCELERATION AND INCLUSION LAW TO THE

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EFFECTS OF TAX REFORM FOR
ACCELERATION AND INCLUSION LAW
TO THE SALES IN PALA-O PUBLIC
MARKET
By: Sherifah Mae B. Mangondato, Jasmen O.
Cabalida, Nasrima P.Ibrahim, Nur-Hussien M.
Mimbantas, Chris T. Sagarino and Jackylyn M.
Maneja
1.1 Introduction
In an era of fiscal austerity, questions of Tax
Reform had once taken center stage thus yielding the
Philippines to undergo resurgence towards its taxation
structure with the newly amended Tax Reform for
Acceleration and Inclusion (TRAIN) Law. It was the
law initiated by the Department of Finance (DOF)
which was ratified by congress and was signed by
President Rodrigo Duterte last December 19, 2017 as
Republic Act 10963 which aims to provide an increase
in the take-home pay of salaried Filipino by reducing
income tax rate while increasing and rationalizing tax
rates in other goods and services. This tax system will
address the current problem wherein it will increase
the back subsidy of tax payers and encourage
compliance. (ABS-CBN News, 2018).
Financing for development requires
developing countries to improve their domestic
revenue mobilization but many low and lower-middle
income countries may be failing to tap their full
revenue potential (International Monetary Fund,
2011).According to the Central Bank of the
Philippines (2017) price stability is a universal goal
shared by monetary authorities across the globe as it
allows both households and firms to plan ahead and
arrive at sound consumption, investment, saving, and
production decisions. This has been supported by
substantive quantitative studies which reinforce the
view that inflation adversely affects long-run
economic growth (Yap, 1996).
The approach to identifying tax changes is
exogenous to current economic conditions. Income tax
has a central role in revenue generation which has an
effect to wide varieties of economic activities gauging
the overall efficiency of a specific economy producing
an expansion of supply as well as the progressivity of
back subsidy, maintenance of revenue levels and the
distribution of tax burdens to taxpayers. (Romer &
Romer 2010).
“Effects of Tax Reform for Acceleration and Inclusion Law to the Sales of …….”
There were also studies aiming to assess the
effects of reforms, such as in public financial
management of revenue authorities (Moore, 2014).
There were some underlying studies that encompass
the vulnerability of revenue to external stocks using
export composition to capture economic structure and
differentiating countries according to income levels,
resource endowments and political regime. Low
income countries are vulnerable to shocks, especially
in terms of trade in market, democratic regime seems
to be less vulnerable to revenue losses due to shocks
than non-democratic whereas revenue in resource rich
countries is more vulnerable to shocks (excepts natural
disasters) than non-resource rich
countries.(Moore,2014).
Pala-o Public Market is one of the major
producers of the necessities and commodities of the
consumers in Iligan City thus the way it will be
affected by the newly implemented TRAIN Law is of
great concern. This study aimed to understand the
effects of the taxation structure to the economy in the
long term as well as to mitigate its effect towards
economic growth. This study also aimed to investigate
the affectivity of TRAIN law in localities such as
Iligan City and its impact not only to the store owners
and the consumers but to the society and economy as a
whole.
1.2 Conceptual Framework
Figure 1: The conceptual framework of the study
This study was revolving around the Effects of
TRAIN Law to the different type of stores in Pala-o
Public Market regarding the sales performance of
stores. The types of stores are fruit stands, vegetable
stalls, meat shops, rice dealers and etc. This study was
aiming to asses if there was change in the sales
Page 1
performance of these stores before and after the
implementation of the aforementioned law.
1.3 Statement of the problem
This study was aiming to find the different
effects of Tax Reform for Acceleration and Inclusion
(TRAIN) Law to the sales performance of stores in
Pala-o Public Market. This study also soughed to
answer the following questions:
1. What type of store is affected by the TRAIN
Law in its sales performance?
2. What are the effects of TRAIN Law to the
sales performance of stores before and
after its implementation?
3. What are the store owner’s perceptions
towards TRAIN Law?
1.4 Hypothesis
H1: There is a relationship between the type of
stores and the sales performance of
the stores in Pala-o Public Market.
H2: There is a relationship between the sales of
stores and the implementation of
TRAIN Law.
H3: There is a relationship between the type of store
and the perception of store
owners towards TRAIN Law.
1.5 Significance of the study
This research has a purpose of studying the
effects of the newly amended Tax Reform for
Acceleration and Inclusion (TRAIN) Law in the
Philippines to the sales performance of stores in Pala-o
Public Market located in Pala-o, Iligan City. This
study is beneficial to the following persons:
BUSINESSMEN. This study is useful to businessmen
because it helped them know and understand the
effects of TRAIN Law to the sales performance of
their stores as well as it will increase their level of
awareness towards the newly implemented taxation
structure in our country.
CONSUMERS. This research is of great help to the
consumers for it provides a further knowledge about
the resurgence of the Philippine taxation system
together with its effects to the sales performance of
stores where the consumers avail products for their
daily needs commodities.
“Effects of Tax Reform for Acceleration and Inclusion Law to the Sales of …….”
FUTURE RESEARCHERS. This study will be
beneficial to the future researchers for it will
determine not only the effects of TRAIN Law but as
well as its role to a wide variety of economic activities
1.6 Scope and limitaiton
This study only focuses on the Effects of Tax
Reform for Acceleration and Inclusion Law to the
Sales in Pala-o Public Market. The researchers
conducted a survey to 277 store owners owning
different types of stores such as grocery/sari-sari
stores, fruit stands, RTWs and others. The research
took place at Pala-o Public Market, Pala-o, Iligan City.
The researchers used Descriptive Research Design.
The sampling design that is used in this study is
judgmental and convenience sampling. The
researchers also used the Questionnaire Method as a
tool for gathering and collecting data.
1.7 Operational definition of terms
Effects- a change which is a result or consequence of
an action or the extent to which something succeeds or
is operative. (Oxford Dictionary,2018)
In this study, it is noted as the change in the sales of
stores whether it is high or low after the
implementation of TRAIN Law.
Inflation Rate-Inflation is the rate in which the
general level of prices of goods and services increase
(GMA News, 2018)
In this study, it is the increase in the prices of goods
due to the tax levied to it.
Market- An actual or nominal place where forces of
demand and supply operate, and where buyers and
sellers interact to trade goods, services, or contracts or
instrument, for money or barter.(Business
Dictionary,2018)
In this study, market, particularly Pala-o Public Market
is one of the major producers of the necessities of the
people in Iligan City and is one of the most affected
market place of the city.
Performance- The action or process of performing a
task or function. (Oxford Dictionary, 2018)
In this study, performance means if the sale is
productive or not, if the products are saleable or not
and if the supply is enough for the demand of the
consumers or not.
Tax- Is an amount of money that you have to pay to
the government so that it can pay for public services.
(Collins English Dictionary,2018)
Page 2
In this study, tax is the main reason behind the sudden
increase in the price of the products.
TRAIN Law- Is the reduction in personal income tax,
leading to higher take-home pay. (Coins.ph,2018)
In this study, TRAIN Law is the one who is
responsible for the inflation rate.
3.1 Research design
This study used Descriptive Research Design
in interpreting the data. The Descriptive Method was
used to describe the store owner’s experiences. The
researchers also used Correlational Method to
determine the relationship between Tax Reform for
Acceleration and Inclusion (TRAIN) Law and the
sales performance of their stores. The researchers also
used survey questionnaires in collecting the data from
selected respondents and interview method to assess
the insights of the respondents towards Tax Reform
for Acceleration and Inclusion (TRAIN) Law.
3.2 Research setting
Figure 2: The Map of Palao Market
Figure 3: Pala-o Public Market
This study is conducted in Pala-o Public
Market that is located in Pala-o, Iligan City. Pala-o
Public Market is one of the major producers of the
necessities of the people in Iligan City. It is also one of
the market places in Iligan City that comprises of
estimated nine-hundred (900) store owners selling
“Effects of Tax Reform for Acceleration and Inclusion Law to the Sales of …….”
groceries, fruits, vegetables, meat and other products.
Pala-o Public Market has a variety of facilities such as
an office to cater to both store owners and customers.
3.3 Research instrument
The researcher will use questionnaire in
collecting data for this study.
A questionnaire that contains a combination of
9 questions which is both qualitative and quantitative
which are related to the study. It includes a specific
place and space in the paper where the respondents
will write their answers to the questions. The
researchers also used interview method to know the
insights of the store owners about the newly amended
Tax Reform for Acceleration and Inclusion (TRAIN)
Law and its effect to the sales performance of the
stores.
3.4 Development of research questionnaire
To develop the research instrument which is
the questionnaire, the researchers should always know
the purpose of the instrument, its advantages and
disadvantages, approaches and steps to be taken. The
purpose of the questionnaire is to discover the store
owner’s perspectives on the effects of Tax Reform for
Acceleration and Inclusion Law to the sales
performance of their stores. These questionnaires will
also assist the researchers in conducting an effective
face-to-face interview with the respondents. To
develop the research instrument, the researchers will
also follow these: a. Identifies the goal of the
questionnaire; b. chooses what type of questions; c.
develops questions for the questionnaire’ d. ensures to
protect the privacy. The researchers used a mixed
questionnaire which is a combination of open ended
and close ended questions, wherein the respondents
were free to express their views and opinions, also
some of the questions are limited to the stated
alternatives.
3.5 Data gathering procedure
The researchers used survey questionnaires as
a mean of gathering the data that was needed for this
research. The survey questionnaire was made up of
questions related to the statement of the problem. The
survey questionnaire was then validated and revised
before the actual data gathering. The same
questionnaire was distributed to the respondents for
them to answer. The survey questionnaire was then
retrieved and the result of the survey was tabulated.
The tabulized result was then interpreted.
Page 3
 There should be 75 people as the respondents
for the qualitative interview

3.6 Data analysis

After the data gathering, the researchers had
tabulated, analyzed and interpreted the data using the
following statistical methods and techniques shown
below:
1. Frequency and Percentage
Figure 4: The data gathering procedure of the study This method was used to summarize the gathered data
With the research design applied, the method from the survey questionnaires that the respondents
of data gathering is by conducting a survey with the answered.
use of a questionnaire as well as an interview. The 2. Mean
researchers visited and interacted with the respondents This method was used to determine the average scale
from Pala-o Public Market to answer the administered of the given answers or data by the respondents.
questions on the Effects of Tax Reform for 3. T-test
Acceleration and Inclusion Law to the Sales of their This method was used to to determine the effect of
stores. The researchers gathered data using the same TRAIN Law before and after its implementation.
questionnaires and interview questions to all 4. Slovene’s Formula
respondents. It was easier for the researchers to The Slovene’s formula is used to determine the
analyze and interpret the gathered data. number of samples to be used as a respondents for
both the quantitative and the qualitative data gathering.
The sampling design that is used by the
researchers in this study is a combination of 4.1 RESULTS
judgmental and convenience sampling. Judgmental Table 1: Percentage of Stores that are Affected by
sampling is a non-probability sampling technique used Train Law in its Sale Performance
where the researchers will select the respondent to be TYPES OF STORES PERCENTAGE
sampled based on their knowledge and professional
judgment. The respondents were chosen from the 1. Fruit stand 2.17%
types of stores in Pala-o Public Market. On the other 2. Vegetable Stall 2.17%
hand, convenience sampling is a non-probability 3. Livestock 12.64%
sampling technique used where the respondents will be 4. Meat shops 25.63%
selected based on their availability, accessibility and 5. RTWs/Footwear’s 7.58%
proximity to the researchers. 6. Flower Shop 7.94%
There are estimated total of 2000 stores in 7. Grocery Store 59.93%
Pala-o Public Market. The researchers only selected 8. Sari-Sari Stores/Stalls 39.71%
Two Hundred Seventy-Seven (277) store owners to 9. Bakeshops 5.42%
answer the questionnaires and 75 of them for the 10. Fish Stalls 1.08%
interview. 11. Rice Dealers 94.58%
The sample of the respondents will be
determined by the Slovin’s Formula.

“Effects of Tax Reform for Acceleration and Inclusion Law to the Sales of …….” Page 4

Figure 5: Percentage of Stores that are Affected by
Train Law in its Sale Performance
In the table presented above, 94.58% of the
respondents believed that the Rice Dealers also known
as the Rice sellers is the most affected stores in
TRAIN LAW based on its high prices of the types of
rice brands that they sell. It is followed by the Grocery
stores which garnered 59.93% and then Sari- Sari
Stores, which garnered 39.71%. 25.63% of the
respondents said that meat shops is highly affected
followed by livestock with 12.64%, flower shops with
7.94%, RTWs/Footwears with 7.58%, bakeshops with
5.42%, vegetable stalls with 2.17%, fruit stands with
2.17%, and lastly, fish stalls with only 1.08%
respondents believes that has been affected by train
law.
Table 2: The Effects of Train Law to the Sales
Performance of Store before the implementation.
Figure 6: The Effects of Train Law to the Sales
Performance of Store before the implementation.
“Effects of Tax Reform for Acceleration and Inclusion Law to the Sales of …….”
In the table shown above, 72.56% of the
respondents agreed that the sales performance of their
stores is high and productive before the TRAIN law
implementation and 23.83% of the respondents
strongly agreed that their stores’ sales performance
were high with the only 3.25 % of the respondent
responded that they disagree with the remaining 0.36%
of the respondent responded that they strongly
disagree. In question number two, 68.23% of the
respondent responded that they agree that their product
are saleable and affordable with 24.91% saying that
they strongly agree. 6.50% of the respondents disagree
that their products are affordable and 0.36% says that
they strongly disagree. On the last question presented
to the respondents, 71.84% of the respondents agree
that they have enough supply for the demands of the
consumers when it comes to their quantity of products.
23.83% said that they strongly agreed with only 4.33%
said that they disagree and 0% or none of the
respondents said that they disagree.
Table 3: The Effects of Train Law to the Sales
Performance of the Stores After Implementation.
Figure 7 The Effects of Train Law to the Sales
Performance of the Stores After Implementation.
In the table shown above, 23.83% of the
respondents agreed that the sales performance of their
stores is high and productive before the TRAIN law
implementation and 2.53% of the respondents strongly
agreed that their stores’ sales performance were high
with the staggering amount of 46.21 % of the
respondent responded that they disagree with the
remaining 27.44 of the respondent responded that they
Page 5
strongly disagree. In question number two, 21.30% of owners towards TRAIN Law based on their
the respondent responded that they agree that their knowledge about it and its implementation in Pala-o
product are saleable and affordable with only 2.53% Public Market.
saying that they strongly agree. 50.90% of the
respondents disagree that their products are affordable 5.2 Conclusion
and 25.27% says that they strongly disagree. On the The conclusion below was drawn from the findings of
last question presented to the respondents during the this study:
survey, 33.21% of the respondents agree that they TRAIN Law is amended by the government to
have enough supply for the demands of the consumers help the society and its people thru its “Build Build
when it comes to their quantity of products. 37.55% Build Project” and to deal with poverty by decreasing
said that they strongly agreed with 22.02% said that tax rates from salaried Filipinos but its effect is mostly
they disagree and with only 7.22% of the respondents felt by the minor sectors. The taxes that are levied on
said that they disagree. other goods and services tend to increase the price of
the products. The researchers also noticed that not all
the store owners are aware of TRAIN Law and its
5.1 Summary of findings impact to their lives.
1. What type of store is affected by the
TRAIN Law in its sales performance? 5.3 Recommendation
The researchers noticed that not all stores are The recommendation for the store owners
affected by the TRAIN Law. As shown in Table 1 regarding their problem is that they must be taught
(Figure 1), the store owners have different answers about TRAIN Law and its effects in their lives. In
regarding which stores are affected by the TRAIN order for the store owners to gauge the performance of
Law. Majority of them answered that rice dealers, their stores, they must first be aware of its effects,
grocery/sari-sari stores and meat shops are the most platforms and impacts. The government must also
affected type of stores in Pala-o Public Market thought about the effects of TRAIN Law in the long
regarding its sales performance since these stores are run and consider who are most affected by its
the ones who continuously increased its price due to its implementation in the Philippines.
rapid inflation rate since the implementation of
TRAIN Law.
2. What are the effects of TRAIN Law to the
sales performance of stores before and after its
implementation?
The Table 2 (Figure 2) shows that the sales
performance of stores was high and productive, the
products that they sell were affordable and saleable
and the supply was enough for the demands of the
consumers before the implementation of TRAIN Law.
The Table 3 (Figure 3) implies that the sales
performance of stores and its productivity decreased
due to the inflation rate. The products that they sell are
still affordable but there is a change in its pricing. It is
still saleable but the supply of products especially rice
is not enough because of the demands of the
consumers even if its price is high.
3. What are the store owner’s perceptions
towards TRAIN Law?
The researchers found out that most of the
store owners in Pala-o Public Market are not aware of
the implementation of TRAIN Law or does not have
enough background of it. Some has knowledge about
TRAIN Law but do not know how much or in what
way does it affect the sales performance of their stores.
Table 4 (Figure 4) shows the perception of the store

“Effects of Tax Reform for Acceleration and Inclusion Law to the Sales of …….” Page 6
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