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DESCRIPTION:
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 as to
safeguard particular sectors from soaring prices.
BACKGROUND:
President Rodrigo Roa Duterte signed into law Republic Act No. 10963,
otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) Act, the
first package of the Comprehensive Tax Reform Program (CTRP, on December 19,
2017 in Malacanang.
The TRAIN 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” and social services programs.
This tax reform package corrects a longstanding inequity of the tax system by
reducing personal income taxes for 99 percent of taxpayers, thereby giving them the
much needed relief after 20 years of non-adjustment of the tax rates and brackets.
This is the biggest Christmas and New Year gift the government is giving to the people.
ADVANTAGES:
•Income Tax
Simply put, income taxpayers who earn approximately P22,000 monthly and below are
now exempted from income tax payment. These employees will be able to receive their
salary without any deductions because of tax.
Aside from that, Presidential Spokesperson Harry Roque said the law also simplified
taxes for small taxpayers, including self-employed professionals, with the payment of a
flat tax of 8 percent on gross sales or receipts instead of income and percentage taxes
which are filed once a year.