Positive effects of Train law

on the philippines
SOURCE:
AUTHOR
https://www.philippinetaxationguro.com/w

Rhiana smile R lopez hat-is-the-effect-of-train-law-on-the-

philippine-tax/
What train law accomplished on the Philippine taxation system? What changes does this new tax reform
had made to our tax system? What taxes are partially and fully affected by this new tax reform 2018?
Why should you know these changes?

Changes on Value-added tax

(VAT) under Train Law
Other Taxes Affected by Train Law
2019
The influence of rail legislation on this new tax
reform is significant, especially in terms of value-
added tax (VAT). To increase the VAT base, the train Other taxes were not mentioned above that are directly affected by
legislation repeals 54 rules on VAT exclusions and these new tax reforms. Some of these taxes are documentary stamp
zero-rating under special laws. taxes (DST). For more detailed discussions on DST 2019, you can click
this link. Other taxes are foreign currency deposit units (FCDU), capital
Zero-Rated Transactions gains on non-traded stocks, cosmetic procedures, and stock
VAT Exemptions Status transactions tax (STT).
Additional to VAT-Exempt
Transactions
Updates on VAT-Exempt 1. Accepting demand, time, and call deposits or issue negotiable certificates of
Thresholds time deposits
2. Borrow with maturities not exceeding 360 days
3. Deposits and extend loans and advances
What effect does the rail law have on
4. Engage in foreign exchange trading and deal in foreign currency
excise taxes? It might either boost or
instruments.
0 Effects of Train Law on Philippine Tax System lower excise tax rates. Automobiles,
5. Discount bills, acceptances, and negotiable certificates of deposits.
petroleum goods, sweetened beverages,
6. Take part in interbank short-term transactions of not exceeding 360 days,
cigarettes, and mineral items are all
such as credit lines of Philippine banks with correspondents’ banks,
affected by the new tax legislation.
In 2018, the railway tax law was completely enforced. This tax reform aims to simplify our tax interbank call loans, and interbank loans for general liquidity. Any of these
structure, encourage greater investment, provide more employment opportunities, and transactions do not require approval from the Central Bank.
reduce poverty. Furthermore, these tax measures seek to collect additional cash that will be
The other effects of train law are not
utilized to improve education, health, and public services by developing more infrastructure.
Conclusion favorable to the additional taxes. For
Personal income tax, estate tax, donor's tax, value-added tax (VAT), passive earnings, example, excises taxes on automobiles,
The influence of the train law on the Philippine Tax System has been significant. The personal income tax rates
documentation stamp tax (DST), and other administrative judgements and processes are all petroleum products, sweetened beverages
affected by this change. Cosmetic surgery and sugar-sweetened beverages now face a tax as a and exemption criteria were adjusted as a result of this tax reform. It makes it possible for more people to be the highest tax rates on cigarettes. The
result of these developments. tax-free. This tax structure benefitted a larger number of people, including those who are working and had other taxes that increased the tax rates
mixed earnings. The train law also established consistent tax rates for the estate tax and the donor's tax, were mineral products, foreign currency
Impact of train law on Personal Income Effect on Estate Tax under making it easier to calculate tax liabilities. Additionally, several tax thresholds have been raised, resulting in deposits unit (FCDU), capital gains tax on
Tax Train Law
fewer taxes to be paid. One of these threshold modifications is the increase in the amount of money that is tax- non-traded stocks, and stock transaction tax
free from $10,000 to $250,000. Deductions for estate taxes have also been extended from $1 million to $5 (STT).
Not only do the tax rates and personal
million.
exemptions change as a result of the This tax reform reduces the estate tax
implementation, but so do the tax rates and
rate from a range of rates (5 percent to
exemptions. The old individual tax gives any
individual a personal exemption of $50,000 20%) to a single rate of 6% dependent on
and further exemptions of $25,000 for each the value of the decedent's net estate.
eligible dependant up to four. The personal The decedent's net estate is calculated
income tax does not apply to anyone who
by subtracting all permissible deductions
earns less than $10,000 in taxable income.
from the entire gross estate.