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.[1] The TRAIN Act is the first of four packages of
tax reforms to the National Internal Revenue Code of 1997, or the Tax Code, as amended.[2] This
package introduced changes in personal income tax (PIT),[3] estate tax, donor's tax, value added tax
(VAT), documentary stamp tax (DST) and the excise tax of tobacco products, petroleum products,
mineral products, automobiles, sweetened beverages, and cosmetic procedures.[4]
The prominent features of the tax reform are lower personal income tax and higher consumption tax.
Individual taxpayers with taxable income not exceeding ₱250,000 annually are exempted from
income tax. The exemption for minimum wage earners is retained in the revised tax system. Tax
rates for individual taxpayers still follow the progressive tax system[5] with the maximum rate of 35%,
and minimum rates of 20% (taxable years 2018 to 2022) and 15% (2023 onwards). On the other
hand, consumption taxes, in the form of higher excise tax on tobacco products, petroleum products,
automobiles, tobacco, and additional excise tax on sweetened beverages and non-essential,
invasive cosmetic procedures were introduced. It also expanded the VAT base by repealing
exemption provisions in numerous special laws.
The TRAIN Act is aimed to generate revenue to achieve the 2022 and 2040 vision of
the Duterte administration,[3] namely, to eradicate extreme poverty, to create inclusive institutions that
will offer equal opportunities to all, and to achieve higher income country status. It is also aimed at
making the tax system simpler, fairer and more efficient.[6] 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.[7] On the other hand, unprecedented inflation rates
that exceeded projected calculations,[8] 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.

Package One[edit]
The overarching goal of the first package of the TRAIN is to "create a simpler, fair, and more efficient
system".[24] Through this program, the richer tax payers of the Philippines will pay a greater
contribution to enable the government to execute its programs and services targeted to the general
improvement of the country, especially the less fortunate.[24][25]There are six (6) main key provisions,
three (3) additional excise taxes, and four (4) financial taxes.[26]
Income Tax[edit]
"The TRAIN lowers the Personal Income Tax (PIT)for all taxpayers except the rich".[24] Effectively,
personal taxes will be reduced for 99% of the Philippine tax payers.
The new PIT is summarized in the table below

Percent of
Annuable Income Tax Tax Rate
Taxpayers

₱0-250,000 0% 83%
 Over ₱250,000-400,000 20% of the excess over ₱250,000 8%

Over ₱400,000-800,000 ₱30,000 + 25% of the excess over ₱400,000 6%

Over ₱800,000-2,000,000 ₱130,000 + 30% of the excess over ₱800,000 2%

Over ₱2,000,000- ₱490,000 + 32% of the excess over

1%
8,000,000 ₱2,000,000

₱2,410,000 + 35% of the excess over

Over ₱8,000,000 0.1%
₱8,000,000

Additionally, minimum-wage earners are still exempted from PIT. The Law also ensures a minimum
wage earner who incurs a small raise will not have his overall salary (with the PIT deducted) less
than minimum wage. Also, married couples where both parties are working may be exempted up to
a total of ₱500,000. This does not include the exemption from the first ₱90,000 of their thirteenth
month pay and additional bonuses. Finally, Self-employed and professionals with gross sales below
VAT can only pay 8% flat tax instead of their income and personal tax