Abstract:

This study focuses on how the R.A. #10963 –Tax Reform for Acceleration and Inclusion
otherwise known as TRAIN LAW affect the transactions made by consumers on a daily basis.
This law is implemented in order to support the “ Build Build Build “ Program that funds the
upcoming projects for the betterment of the country; projects such as infrastructures, road work,
health care , programs etc. This study will encompass with how this law will change one’s
budget, expenses, investment and funding for their wants and needs. Understanding the law is
not the same as knowing how it will be implemented. New laws require rules and regulations on
how these changes will be applied. These implementing rules and regulations are issued soon
after the law is enacted. Since then, the Bureau of Internal Revenue (BIR) has released various
regulations, circulars and orders to implement the first package of the government’s
Comprehensive Tax Reform Program. The first, and perhaps the most important part of the tax
reform, is the lowering of the personal income tax. Based on the data gathered, the findings can
be summarized by the response of each socio-economic class (lower, middle and upper class.) In
the lower class, it can be concluded that they are unable to cope up with price changes, tax
increase and other effects of TRAIN LAW due to the income they earn; these particular
respondents still find hardship in settling their budget. Even their benefits from the government
are not enough to sustain their livelihood. As for the middle class, it can be imposed that these
people earn decent money within the minimum wage but still unable to get their finances in
order. These people also said that the government should properly assess the laws they make for
the citizens to understand the purpose of this law. Finally, for the upper class people, it can be
known that one of them are eased with the said law for they are able to save up for investments,
luxury etc. As for the other respondent, he is unable to further familiarize with the law because
he is an OFW but he did base his knowledge on the news regarding this law.
INTRODUCTION

On December 19, 2017, President Rodrigo Duterte signed Republic Act No. 10963,
otherwise known as the Tax Reform for Acceleration and Inclusion Act (TRAIN), with the goal
to: create a more just, simple, and more effective system of tax collection, as per the constitution,
where the rich will have a bigger contribution and the poor will benefit more from the
government’s programs and services (Department of Finance, 2018). In practical terms, the
TRAIN Law is supposed to reduce tax rates of salaried Filipinos, thereby increasing their take-
home pay. But, at the same time, it is intended to increase tax rates on other luxurious goods and
services to compensate for the lost revenue. The TRAIN law will provide hefty income tax cuts
for majority of Filipino taxpayers while raising additional funds to help support the
government’s accelerated spending on its “Build, Build, Build Program” and other social
services programs. Other tax-reform packages under the CTRP(Comprehensive Tax Reform
Program) that have yet to be passed by Congress include: Package 1B, which includes increasing
the motor vehicle users charge, lifting of the bank secrecy law and automatic exchange of
information; Package 2, which focuses on lowering corporate income tax and the rationalization
of fiscal incentives; Package 3 on property valuation; Package 4 on financial taxes; and Package
2 Plus, which includes taxation on alcoholic beverages. The study want to find out the overall
effect of TRAIN Law to the Filipino consumers.

Methodology

The researchers gathered a total of seven (7) individuals whom contributed opinions and
information needed by the researchers. The respondents are divided into three groups, two (2)
from the lower class, three (3) from the average class, and two (2) from the higher class. The
researchers based the class of the respondents to the respondent’s profession. Interview was the
instrument used by the researchers, filming was involved due to the researchers needed it for data
gathering. Personal information was collected during the interview, the researchers are informed
about the privacy and safety procedures that specific information can be publicized and the rest
are remained private. The researchers formulated a total of nine (9) questions that are used in
gathering information. The questions are the way to find the effect of train law to the consumers
that are needed by the researchers. The questions are organized in which the researchers asked
their idea about train law and then proceed to the general and personal questions. General
questions in which their opinions are asked about the effect of train law to the majority of the
people and personal questions in which their opinions are asked about the effect of train law to
their personal lives.

Results

The researchers gathered data from Filipino consumers that belongs to different profession to
ensure that the result would encompass all of the socio-economic class. The data gathered shows
that most of respondents has a basic knowledge about the TRAIN Law but lacks a deeper
understanding about it. The respondents usually explain their understanding of the said law based
on how it affects the Filipino consumers in general such as personal experiences and
observations. Most of the respondents agreed that there is a major changes in the market since
the law was implemented. People that belongs to the lower socio-economic class explains that
they are having a hard time in coping up with the increasing price of common goods. One of
respondents that are claimed to be part of the lower socio-economic class believed that this
program gives nothing but disadvantage for those who have a low salary while the other one
believed that the program did not affect their budgeting too much because they only buy things
that are necessary for living. One of the respondents also claimed that the program that is meant
to help the poor Filipino consumers contradicts to what is really happening because most of the
poor Filipinos does not have a regular salary. Thus, it appears that they do not enjoy the benefits
of not having income tax liability and suffer from the increasing price of goods at the same time.
This is supported by the respondent saying that she is already retired from her work but she still
need to work to earn money for daily living. Though most of the respondents believed that the
program has more disadvantage rather than benefit, some of the respondents stated that “It is
beneficial because it I am able to keep higher percentage of my salary than before.” She also
stated that it is good for everyone because it will encourage them not to buy goods that are bad
for the health such as vices and softdrinks. Another benefit of the program is that it will give the
Filipino people a long-term effect because its primary goal is to support the budget of the “build
build build” program which will greatly enhance the transportation system in our country. Thus,
it will heavily boost the economic rate of the country in the future. Overall, the respondents
believe that this program greatly affects the poor Filipino consumers in budgeting and does not
give any benefits especially to those people that does not have a regular salary. Everyone is
affected by the said program but the rich Filipino consumers are the least affected because they
are able to have a proper budgeting without sacrificing their health. For the lawmakers, majority
of the respondents says that laws should be carefully examined first before it is implemented.
They should be considerate especially for those people that belong in the lower socio-economic
class because it is hard for them to cope up with even the smallest change in the market. It is also
suggested for them to continue the program since it is already started and it is beneficial for
every consumer.

Discussion
 TRAIN Law is Tax Reform For Acceleration and Inclusion- the idea was to give support to
the poor, to raise taxes of luxurious items and services. People that belong to the lower socio-
economic class suffer the most because it is hard for them to cope up with the inflation rate in the
country. There are also different side in implementing this law, some of the consumers agree that
there is a significant advantage while others claimed that the program has no good effect to the
Filipino people.

Overall, the results of the study has an effect to the consumers; there is advantage and
disadvantage, the government itself should be considerate before they verify/approve the law; if
the law they presented is suitable in all classes(lower, middle and upper) they should consider the
factors of its claims/purpose in all of the classes and should be well-explained to the society in
order to understand it its objective.

Most of the findings /results of the study has an effect to each social class (low, middle, upper)
and this can be set into a broader context when the government will base these findings on how
the law works for all the people who are affected by this law. The government should not just
stick with the perspective they have in the said law, but to also ask for the consent of the Filipino
people in order to put things intact and to make some changes if some of the implementations
under will cause some serious damage to these citizens’ lives. A lot of circumstances regarding
the TRAIN Law are affecting their livelihood in such a way that some of the products that are
increased by the tax are unnecessary because the prices given didn’t cause any direct changes in
the economical state of the country. Hence, the government sh ould just focus on setting taxes on
products that are vitally used and consumed by people and these products should be constantly
bought for the tax increase to be applicable.