Exercise 4.3.

1
Chuga-Chuga, Choo-choo…Train!
Group No.: 6 – Agustin, Cuario, Oligario, Wang Section: A3
Instruction: In 2017, the Train Law revolutionized taxation in the Philippines as it was seen to
financially empower the people by reducing personal income tax. However, it was also seen in a
negative light because of drastically inflated consumer prices due to the increase in custom duties
on petroleum product and sweetened beverages. Research on the significant provisions of the
TRAIN Law and analyze their implications by citing concrete examples. After your analysis, give
your personal view on the issue.
Tax Reform for Acceleration and Inclusion Act
Republic Act No. 10963, or more commonly known as the TRAIN Law, states that this tax
reform will offer colossal income tax cuts for the majority of Filipino taxpayers while raising
additional funds to help support the government’s programs such as “Build, Build, Build” and
other social services. The following are some of the provisions that the group would like to express
their thoughts upon:
First, the reduced income tax rates, the provision states that citizens earning P250,000 or
less every year is automatically exempted from paying the income tax; further, tax exemption also
covers 13th-month pay and other mandated bonuses. This is considered an advantage, this means
they get to take home higher salary, more chances of saving money to buy better things and being
able to bring more foods to their tables, thus, less hunger, and malnutrition issues.
However, due to reduced taxes, the government need to make up for loss of revenue.
Because of this, sweetened beverages like sodas and other sugar-filled drinks cost a bit more, this
is to reduce the incidence of obesity and diabetes; on the other hand, milk products, natural fruit
and vegetable juices, and pre-packaged coffee products are exempted. Further, cigarettes are more
expensive too, the tax reform imposed this to curb the number of smokers in the country. All of
these are beneficial to our health, it is very thoughtful of Mr. President to be looking after us.
Unfortunately, if sweetened beverage prices were to increase P6 per liter, while those with high
fructose corn syrup are taxed P12 per liter, and Cigarette prices will increase by P2.50 increments
started 2018 until 2023, and by 2024, there’ll be a price increase of 4% every year. How about the
street vendors? Their lives rely on selling these kinds of stuffs, while most of us are thinking if we
have enough money to sustain us for months, they are worrying if they have enough for tomorrow.
They fight to keep themselves alive every day. This tax reform is not for everyone, increasing the
price of goods will force the vendors to increase their capital, making them suffer for a while
before they get back on track. And once again, when the price increases, they will be forced to go
through it again and again for as long as they are alive. The nation needs money, but it needs more
of humanity, compassion, kindness and empathy. If we have all those things, the nation will rise
altogether, poverty will be lessen, and every law that shall be executed will work and be effective
for every one of us because the government’s decisions prioritize the people’s best interest.
Additional burden, documentary stamp tax (DST) such as bank checks, life insurance
policies, pre-need plans, warehouse receipts, powers of attorney, mortgages, and sales documents
has been doubled, with the new documentary stamps tax ranging from P1.50 to P3.00 under the
tax reform. Although income taxes greatly decrease for almost all employees, they will be forced
to spend more money on things that they might need.
This tax reform is complicated and is not for everyone. We are human beings, we are
adaptable to changes, but no one chooses to be poor. Even if we find a way for us to adapt into this
system, no citizen shall suffer under the leaders whom they have voted for, whom they have
trusted. This tax reform is one of the proofs why our country is in poverty, also, it proves that the
rumors about our political system is true, and that they are not trustworthy. Lastly, for most of us
in the middle class, even if the TRAIN law increases the price of basic goods and commodities,
we will still be able to enjoy higher take-home pays because of the decrease in personal income
taxes. It’s up to us to budget our money, form healthier money habits, and minimize spending on
stuff that we do not need.