TRAIN LAW (TRAIN2 TAX BOOKS)

The Tax Reform for Acceleration and Inclusion (TRAIN) Act, officially cited as
Republic Act No. 10963, is the initial package of the Comprehensive Tax Reform
Program (CTRP) signed into law by President Rodrigo Duterte on December 19,
2017.TRAIN consists of revisions to the National Internal Revenue Code of 1997, or
the Tax Code.This reform includes packages that make changes in taxation
concerning the personal income tax (PIT),estate tax, donor's tax, value added tax
(VAT), documentary stamp tax (DST) and the excise tax of petroleum products,
automobiles, sweetened beverages, cosmetic procedures, coal, mining and tobacco.

The prominent features of the tax reform is that people who earn ₱250,000 annually
or ₱21,000 monthly and below are exempted from paying personal income tax (PIT).
This includes minimum wage earners, who were also exempted in the former tax
system. On the other hand, those earning over ₱250,000 have tax rates following a
set PIT schedule. Essentially, greater income is taxed at higher tax rates. This
denotes that low to middle income-earners get to have a higher take home pay, while
high income-earners have a bigger contribution to tax revenues. Increase in
consumption taxes intend to counterbalance PIT tax exemptions.

The TRAIN LAW is one of the primary ways in which the 2020 and 2040 vision of the
Duterte administration is to be achieved, and so, it had optimistic projections about
its effect on the economy, development and poverty alleviation in its inception.
Regardless, contentions about the passing of this law has been present since the
beginning and the subsequent reception by the people since its ratification has been
controversial. In the first quarter of 2018, both positive and negative outcomes have
been observed. The economy saw an increase in tax revenues, government
expenditure and an incremental growth in GDP. On the other hand, unprecedented
inflation rates that exceeded projected calculations, has been the cause for much
uproar and objections. There have been petitions to suspend and amend the law, so

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as to safeguard particular sectors from soaring prices.

The TRAIN Act aims to address the reputed weaknesses of the Tax Code,
specifically through the following objectives:
First, it intends to simplify the previous system to make it more straightforward and
intuitive.
Second, it intends to create a more "just" taxation scheme, wherein taxation is
staggered and distributed on the basis of financial capability and the underprivileged
are able to reap more advantages.
Third, it intends to improve the efficiency by which tax is collected, particularly
tackling issues of compliance.
Fourth, it increases the tax burden felt by the general population thus increasing the
overall inflation rate.

The changes instituted by the tax reform is expected to be able to increase revenue
to finance the infrastructure, healthcare and education programs of the Duterte
administration. The notion that the poor will be taxed less than the wealthy
population is actually a propaganda widely spread by the government, the additional
taxes imposed by the government will just be passed down through the lower and
middle income class thus increasing the inflation.

In the long term, TRAIN Act is just the first from a series of tax reforms, as part of the
CTSP, which will be one of the principal means by which the 2020 and 2040 vision of
the incumbent administration is to be achieved. The vision in 2020 is that poverty will
be reduced from 21.6% to 14%, while 2040 sees the Philippines as having
“eradicated extreme poverty”, established “inclusive economic and political
institutions where everyone has equal opportunities” and achieved “high-income
country status”. This can be achieved if economic growth can be sustained by at
least 7% each year and if the source of growth can be shifted to investment from
consumption. This means prioritizing investments on people through "health,

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education, life-long training, social protection, infrastructure, and research and
development" and investments on infrastructure to boost productivity

Projected effects
The three main categories the TRAIN Law affects with its first package are "Growth
in the Economy", "Employment Generation", and "Effect on Inflation". The DOF
projects the economy to grow by 1.3% by 2022 with a 0.42% inflation due to the
excise tax increase (this is still within the 2-4% target inflation by the Bangko Sentral
ng Pilipinas (BSP); it also predicts to create half a million jobs over the next ten
years, and eight million over the entirety of its life, as well as lift 250,000 Filipinos out
of poverty. Through the increase in excise tax, Package 1 will be able to generate
Php134 Billion. The actual effects in 2018 are elaborated below.

Economic growth
For the first quarter of 2018, the government was able to raise ₱619.84 billion. This
represents a 16.4% growth in revenue compared to the first quarter of 2017. In
monetary terms, the government was able to raise ₱87.44 billion more in this quarter
of 2018 compared to the previous year. "The Philippine economy expanded by 6.8
percent in the first quarter of 2018, making it still one of the fastest-growing
economies in the region even as rising inflation reduced consumption and
productivity in some sectors." DOF Secretary Carlos Dominguez III claimed tax
revenues grew by 18.2%, "exceeding the 9.7 percent nominal gross domestic
product (GDP) growth."

Departments that saw immediate benefits from Package 1 include the Bureau of
Internal Revenue and Bureau of Customs, both with a 14.2% and 24.7% increase in
revenue. This translates to a total of ₱423.1 billion and Php129.8 for both
departments respectively. Other government departments were able to expand their
investment and growths during the first quarter as well due to the increase in income.
Insofar as expenditures go for the first quarter of 2018, the total amounted to ₱782.0

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billion, growing by 27.1%, which also outstripped the 9.7% nominal GDP growth due
to the estimated 40.0% increase in capital outlays. Dominquez also said that the
expenditure effort also rose by 2.73%, which is the highest increase since 2003. This
results in a larger contribution towards GDP growth. As such, revenue effort grew by
0.91%. In addition, public construction expanded by 25.1%, thus boosting GDP
growth by 0.4%. On the other hand, government consumption increased by 13.6%,
contributing an incremental 1.4% to the growth of the GDP. 'Strong macroeconomic
fundamentals backed by tax reforms and the Build, build, build program will continue
to boost economic growth to the optimum 7-8 percent level as the competitiveness of
the economy rises and more jobs are created,' he said."

Inflation
"The inflation rate in June—which exceeded both government and market
expectations—was the fastest pace in at least five years. Year-to-date, inflation
averaged 4.3 percent, above the BSP’s 2-4 percent target range." "It peaked at 5.2
percent for the same month. For the previous months, inflation was pegged at 4.6
percent and in the same period in 2017, 2.5 percent."

This was primarily due to the higher annual rate posted in the heavily weighted food
and non-alcoholic beverages index at 6.1%. The country's food index went up by
5.8% in June 2018. It was 5.5% in the previous month and 3.1% in June 2017. The
following annual mark-ups were also observed for the following food groups:
Rice (4.7%)
Corn (14.1%)
Other Cereals, Flour, Cereal Preparation, Bread, Pasta and Other Bakery Products
(2.4%);
Meat (5.0%);
Vegetables (8.6%);
Sugar, Jam, Honey, Chocolate and Confectionery (3.9%); and
Food Products not elsewhere classified (3.1%).

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As for the rest of the food groups, they either slowed down or remained at their
previous month's rate.
Socio economic Planning Secretary Ernesto Pernia claims that the inflation will most
likely peak on the third quarter of the year and start tapering off by October.

Train 2 tax books

Various sectors have reacted with alarm to what some alert citizens have discovered
in the pages of Senate Bill No. 1906, filed by Sen. Vicente Sotto III. SB 1906, first
called “TRAIN 2,” has been repackaged as “Trabaho” (Tax Reform for Attracting
Better and High-quality Opportunities) to disassociate it from the unpopular TRAIN,
which has been blamed for the inflation and painful economy now besetting the
country. The House of Representatives passed its counterpart bill to SB 1906 this
week.

Sotto’s measure contains a provision that seeks to repeal Section 12 of Republic Act
No. 8047, or the Book Publishing Industry Development Act enacted in 1995, which
exempts books, magazines, periodicals, newspapers, including book publishing,
printing, distribution and circulation, from the expanded value added tax. Should the
provision be retained and enacted into law, such goods and services will be taxed.
The prices of books, including textbooks and raw materials for publishing, are likely
to increase as a result.

The local book community is up in arms over the provision, warning that it would kill
the country’s reading culture by making books even less accessible and affordable.

“You can tax cigarettes to discourage smoking. You can tax sugar for healthy living.
But taxing books will not promote reading,” said Clem Malubay, owner of the
independent Aklatan Bookstore and author of an online petition against the repeal in
change.org.

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Filipino writing organizations Linangan sa Imahen, Retorika, at Anyo and the Unyon
ng mga Manunulat sa Pilipinas, in their joint petition on Facebook, said: “Ang libro ay
hindi lamang karaniwang libangan o aliwang maaaring patawan na lamang ng buwis,
kung nanaisin. Hindi ito bisyo, tulad ng maraming ibig buwisan ngayon. Isa itong
daan patungo sa pagkatuto, paglikha, at pagkilala sa sarili at daigdig. (A book is not
a common form of entertainment that should be taxed at whim. It is not a vice, unlike
other goods that are being taxed. It is a means of learning, of creating and
discovering the self and the world).”

Those who have signed the petitions raise valid questions: Why tax educational
materials, of all things? Why turn book ownership, in effect, into a privilege for a few?

Contrary to observations that Filipinos no longer read books given the current
dominance of social media and television as sources of information, huge turnouts at
book fairs like the Manila International Book Fair and Big Bad Wolf show otherwise.

A survey released by the National Book Development Board in 2012—the most

recent data available—showed that “there still exists an enormous market in the
Philippines for producers of all sorts of reading materials,” with 88 percent or almost
50 million Filipino adult readers. This figure, however, represented a slight decline
from 94 percent in 2003 and 92 percent in 2007.

Those numbers could only further decline with the proposed book tax, and eventually
kill the publishing industry.
This is not the first time that the government has attempted to tax books. Eight years
ago, the Bureau of Customs imposed duties on a shipment of the popular young
adult novel “Twilight,” causing a domino effect on other book imports. The book
community loudly protested, citing the Unesco Florence Agreement of 1950, which
binds signatory states, including the Philippines, not to impose customs duties on
imported educational, scientific and cultural materials. The strong lobby managed to

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convince the administration of then President Gloria Macapagal Arroyo to scrap the
customs duties.

Responding to the growing concerns over the problematic TRAIN 2 provision,

Euvimil Nina Asuncion, Department of Finance legal and communications director,
has reached out to Malubay through Aklatan’s Facebook page. She gave the
assurance that enough legal safeguards are in place to ensure that books will remain
exempt from tax and customs duties.

Such assurances are welcome, but not enough. Until the worrying provision is
definitively stricken out of the final draft of the tax bill, the reading public has to stay
vigilant and continue speaking out against it. Taxing books and making educational
materials more expensive—rendering them out of reach, eventually, to many
ordinary Filipinos—is antidemocratic, an assault on the essential republican ideal of
an informed and critical citizenry.

Most of the people use internet. The use of the internet is mainly for social and
entertainment, but also academic and scientific information as well. Same as the use
of books but in internet it is much easier and faster than books. So it may lead to
decrease of buyer and it can also help us to engage information not just here in the
Philippines but also internationally so I propose that maybe we can learn
competitively by the help of technology Instead of books.

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REFLECTION
There are many reasons enlisted by the congress why books should have tax like
taxes are source of government revenue, it is used to meet all government expenses
, improves economic development , reduces unemployment and finances budget
deficit of the government but if education of each Filipinos would be compromised, is
it right anymore? As we all know most students cannot finish their studies because of
financial problems and if books, which is part of their schooling would be more
expensive what would happen? I think the goals of the government should be
parallel to each bill they were going to implement. They were imposing accessible
education but inconvenient on other aspect.
TRAIN 2 may lead to higher tuition in private schools. Because of proposed second
package of tax reform law, it is not impossible to seek the double taxes imposed on
private schools. "Sa dulo, ang mga pamilyang nagpapaaral din ang papasan nito
kaya tataas ang matrikula," (In the end, families of school children carry the burden
of higher tuition.) Senator Bam aquino said, adding that this will leave schools with
less money to invest in quality education.
President Rodrigo Duterte's economic team is pushing hard for the approval of the
2nd of the Tax Reform for Acceleration and Inclusion (TRAIN) law amid strong
opposition. But the 2nd TRAIN package has very few champions and many
opponents including the Senate President Vicente Sotto III, are against. He was
worried and his colleagues fear that the proposal would bring another wave of
inflation.
The House committe approved in principle a bill covering the second package of the
tax reform program, though its chairman signaled that he will rule out any proposals
that would aggravate inflation. “Can we at least agree that we will, as we do the
substitute bill, cut down on items that will contribute or aggravate the rising inflation,”

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Dakila Carlo E. Cua said in Ways and Means Committee Chair.
Part of the reason for the recent inflation is expectations that the tax reform would
indeed increase prices. These inflationary can increase the supply of goods and
other services.
Sometimes we are focusing to build our country’s economic status in good condition
but on the other hand, there were parasites that destroy it from time to time. All the
inconsideration proceed to consumers and the wealth were on the corrupt people.
How is it possible to break one’s culture like publishing books to sacrifice on
believing that it could also contributes to country’s revenue? We should wake up and
evaluate all those opportunities that were disregarded just for meet the goal of
country’s finance.

Tax reform law for books can affect the poor especially for the people who loves to
read and to buy books. There is an increase in salary but the salary itself goes for
paying taxes. The increase of the goods is much higher than the increase of salary.
Some of us already forget the use of books but the law leads us to forget it quickly.

For me freedom of education is luxury that anyone can’t receive. We have to make
sure that every single child either male or female should receive a high quality of
education. One of the biggest issue of education is access and the best way to
access is through reading books is really important when it comes in freedom of
education how can we consider it free if we have to pay expensively for it. It should
be affordable to have a better access in education

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PART 2 - MIDTERM EXAM
1. Define globalization and give atleast three positive and negative effects of it.
- Globalization is simply the process through which integration and interaction of
countries, companies, and people across the globe. The process is as a result of the
investment, outsourced manufacturing and international trade. All these are
supported by information technology, with an aim of bringing economies of various
countries together. It is only through globalization that people, services, and goods
get to move freely across the world, in a manner that is linked and smooth.
(Positive effects of Globalization.)
• Global market
The privatization of industries owned by the state has enabled the emerging markets
to be successful. Most of the companies are increasing the consumer demand
through extension and expansion of their value chain to international levels. As a
result, the positive effects of globalization are expressed by the rising transactions
across the borders.
• Competition
Competition in the market is largely due to globalization. As a result, the positive
effects are visible, since global competition leads to products of high quality. The
enhanced quality of both products and services are based on production approaches
of customer demands and customer services
• Culture
Globalization has resulted in numerous positive effects on culture. There is no single
civilization that had all good practices. Instead, the coming together of various
cultures has made the world today a better place. The welcoming of people from
various backgrounds and civilizations has resulted in the creation of new cultures,

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thus leading societal growth.

(Negative Effects of Globalization)

• Environmental Damage
Increased production means increased utilization of natural resources. Besides,
increased trade results to increased transport, which uses fossil fuels. As a result,
pollution has increased, leading to climate change. The changes in climate are now
a serious threat to humanity and the future of the world, all because of globalization.
• Job insecurity
Due to globalization, most global economy jobs are insecure and temporary. The
impact is mostly felt in developed countries since they can outsource cheaper white
collar and manufacturing jobs.
 Abandonment of Culture
Every community, society, or nation has its values and beliefs, that is to say – own
culture. They are essential because they mold the acceptable behavior of the people
in a particular community. The elders or leaders ensure that the people behave in a
morally upright way. However, globalization mixed different cultures
.
2. Describe globalization in the eyes (point of view) of the OFWs.
• The major effect of Globalization was the opening of jobs for Overseas Filipino
workers. Globalization leads us to better opportunity to have a better job that suits to
sustain our family and love ones. And as a Filipino we can share our story not just in
our country but also in others.

3. Explain the role of globalization in local culture, societies, religion, and

values.
• Local culture.

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Globalization has also led to greater cultural understanding. Just as you personally
experience increased communication through virtual tools, like the Internet,
globalization has helped to improve human connections. Whether you are Googling
about tribal cultures or meeting people from India, globalization allows you to learn
about other cultures and develop a wider cultural understanding through the Internet
and increased opportunities for international travel.

• Societies
The Internet is just one way that you are part of globalization that connects and
mixes cultures, countries, people, and companies through advanced trading
opportunities, investments, and technological capabilities. Globalization that affects
the livelihood of the same individuals from virtual connections to more affordable
goods, such as clothing and food, globalization has been beneficial to many aspects
of society. This is because globalization has led to reduced costs of goods and
increased trade.

• Values
Globalization affects all areas of life. The accelerated pace began to reach not only
the technical innovations and economic solutions, but new ideas, values and
behavior patterns. Under the influence of globalization, openness, information
coming from the media and contact with other cultures, traditional values are
changing. The globalization processes also affect local communities

• Religions
Few cultural changes have had such a profound influence on social life as the
individualization process. A basic condition for assuming a new perception, new
practices and values, compatible with globalized market conditions, with world media
and consumer culture, implies that people, who live immersed in traditional collective
religious identities, must become individuals. The culture and language education
and the adoption of media and marketing raisonnement have brought about

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necessary strategic changes in the new geographic regions or in the old environment

4. Explain the relationship between globalization and global warming

• In the course of modern rapid globalization, a complex network of world-
spanning supply and value-added chains has emerged. The production process of a
single item may involve facilities from all over the world. As a consequence, climate-
induced losses in one place can cause further losses elsewhere by rippling through
the supply chain. And as climate-related weather disasters increase, so will these
effects. But we are having this global activity Earth Hour that shows that we should
unite to save our planet.

5. Can globalization become the ultimate weapon to spread infectious

diseases? Why or why not? Explain.

• As a student I know that there is a lot of possibility for everything so base on my

research I Find out that Globalization process as the flow of information, goods,
capital, and people across political and geographic boundaries, allows infectious
diseases to rapidly spread around the world, while also allowing the alleviation of
factors such as hunger and poverty, which are key determinants of global health. The
spread of diseases across wide geographic scales has increased through history.
Early diseases that spread from Asia to Europe were bubonic plague, influenza of
various types, and similar infectious diseases.

In the current era of globalization, the world is more interdependent than at any other
time. Efficient and inexpensive transportation has left few places inaccessible, and
increased global trade in agricultural products has brought more and more people
into contact with animal diseases that have subsequently jumped species barriers
(see zoonosis).

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Reference Section:

https://www.0.freebasics.com/https/opinion.inquirer.net/116063/train-2-tax-books/ap

https://www.0.freebasics.com/https/en.m.wikipedia.org/wiki/Tax_Reform_for_Acceler
ation_and_Inclusion_Act

https://study.com/academy/lesson/how-globalization-impacts-local-culture-
society.html

https://www.marketing91.com/what-is-globalization/

http://globalization.osu.cz/publ2011/332-337_Swadzba.pdf

https://study.com/academy/lesson/how-globalization-impacts-local-culture-
society.html

https://en.m.wikipedia.org/wiki/Globalization_and_disease

http://file.scirp.org/Html/27-1760125_45169.html

https://www.weforum.org/agenda/2016/07/the-earth-really-is-getting-hotter-and-we-re
-poorer-for-it/

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