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COMPARATIVE RESEARCH ON THE EXPENDITURE OF THE SENIOR HIGH
SCHOOL STUDENTS AFTER THE IMPLEMENTATION OF TRAIN LAW 1
A Qualitative Research
Presented to the Senior High School Department
SCHOOL OF SAINT ANTHONY
Lagro, Quezon City, Metro Manila
In Partial Fulfillment of the
Requirements in Research Project
Accountancy, Business, and Management (ABM) Strand
Ang, Kristine Nicole B.
Dimaliwat, Laleine
Diño, Denise C.
Ediarte, Hana Joy L.
Songcuya, Kay
12-Velasquez
Mr. Jomar Nepomuceno
Research Adviser
January 2019
School of Saint Anthony
APPROVAL SHEET
This Research Paper hereto entitled:
“Comparative Research on the Expenditure of the Senior High School Student
After the Implementation of TRAIN Law 1”
Prepared and submitted by Ang, Dimaliwat, Diño, Ediarte, and Songcuya
In partial fulfillment of the requirements for the subject
RESEARCH
has been examined, recommended and passed the ORAL DEFENSE.
Mr. Jomar Nepomuceno
Research Adviser
Approved and paneled by:
Mr. Jomar Nepomuceno
Research Adviser
Recognized by the Senior High School Department Heads:
MR. SIMOUN VICTOR D. REDOBLADO, LPT
Senior High School Academic Coordinator
DR. JULIET S. REYES
Senior High School Coordinator
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ACKNOWLEDGEMENT
The researchers would like to thank God for guiding the researchers
throughout their study. Special thanks are also given to the researchers' family
and friends for financial support and understanding.
The researchers would also like to express their deep gratitude to Mr.
Jomar Nepomuceno and Mr. John Oliver Ramos who both guided the
researchers and never failed to extend a hand whenever the researchers needed
help.
Lastly, great appreciation is also extended to Mr. Denmarc Labongray and
Mr. Brine Austin Ayun for their valuable and constructive suggestions during the
planning and developing of the research.
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ABSTRACT
Taxes are being collected by the Government from their people to raise funds to
pay the expenditures of the country and to give common good to the public. Tax
Reform for Acceleration and Inclusion (TRAIN) Law has effectively implemented in the
Philippines that affects everyone on their daily expenses. The purpose of this study is to
compare the expenditures of the Senior High School Students before and after the
implementation of TRAIN Law 1. The research explored the management of the Senior
High School Students in terms of their allowance and expenses through survey form.
Based on the results, there is an increase of expenses after the implementation of TRAIN
Law 1 in terms of the students’ foods and beverages and transportation fee while there is
a decrease of savings amount on their daily allowances. All in all, TRAIN Law 1 has
greatly affects the expenses of the Senior High School students in budgeting their
allowance and for paying their daily expenses.
Keywords: Tax Reform for Acceleration and Inclusion Law 1, expenditure, allowance,
budget, savings
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CHAPTER 1
INTRODUCTION
This chapter of the paper presents the problem and setting. It includes the
background of the study, the statement of the problem, significance of the study, and
scope and delimitation of the study.
Background of the Study
Poverty has been and is currently one of the main problems in the Philippines. This is
why the Government officials are making ways to prevent the Philippines to completely
become as the poorest country in the world. The thought of poverty is usually associated
as a political or legal matter. According to Dani Rodrick, “In the past ten years the rule of
law has become important in economic. Indeed, it has become the motherhood and apple
pie of development economics.”
Here in the Philippines one of the ways on how the government manage the
percentage of poverty is by implementing laws and by having a system of taxation to help
them raise funds/budgets for the program that they want to implement. According to Atty.
De Leon’s book citing American Jurisprudence define “Taxation is a process by which the
sovereign through its law-making body, raises income to defray the necessary expenses
of government and also it is the way of the government to raise funds for its necessary
expenditures”.
Taxes goes to many places like paying the salaries of the government workers,
helps to support common resources and ensure the roads to be safe and well-maintained.
Taxes fund many types of government programs, public libraries, parks and help the poor
and less fortunate as well as many schools.
On December 19,2017 President Rodrigo Duterte, the current president of the
Philippines signed the Tax Reform for Acceleration and Inclusion (TRAIN) Law that would
impact the take home pay of the Filipinos, Lowering Personal Income Tax, Simplifying
Estate and Donor’s Tax, Simplified Value Added Tax System, Increasing the Excise Tax
of Petroleum Products, Increasing the Excise Tax of Automobiles, Excise Tax on
Sweetened Beverages. According to the Department of Budget and Management, “The
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ultimate goal is to raise revenues to finance the government’s priorities, namely upgrading
infrastructure and reducing poverty. Taking Package 1A and 1B together, about P1 trillion
will be raised between 2018 and 2022. TRAIN will also enforce a simpler, fairer, and more
efficient tax system.”
The objective of this research is to study and compare the expenditures of the Senior
High School Students before and after the implementation of TRAIN law.
Statement of the Problem
This study aims to compare the expenditure of the Senior High School students after the
implementation of the package one of TRAIN Law towards their transportation fee and
food and beverages. Specifically, the study aims to answer the following questions:
General Problem
1. How does the Senior High School students spend their allowance before the
implementation of TRAIN Law?
2. How does the Senior High School students spend their allowance after the
implementation of TRAIN Law?
3. What is the difference between the expenses of the Senior High School
students to the old BIR tax law to the new established law?
4. How does TRAIN Law affect the way of Senior High School students manage
their allowance?
a. Food and Beverages
b. Transportation fee
Scope and Delimitation
The study intends to determine how TRAIN Law Package One affects the expenditure
on transportation fee and foods and beverages of selected Senior High School students of
School of Saint Anthony in Lagro, Quezon City specifically the Grade 11 students who
commutes. This will not include expenses other than the aforementioned above.
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Significance of the study
Students. This study will give sufficient information to the students about the
effects of the package one of train law on their expenses. In this manner, it will help the
students on how to manage their expenses in a daily basis.
Workers. The study can be valuable to workers as it provides them a take home
pay from train law by knowing the effects of expenditures on their productivity, it would
help them to be more motivated in work
Bureau of Internal Revenue. Thisstudy can assist them in improving the tax and
creating better decisions to alleviate the effects of expenditures.
Future Researchers. This study can be a source of credible information and serve as
the future researcher’s literature review in order to support their claims. It can also serve
as a basis and at the same time to improve their research as they conduct their studies.
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CHAPTER 2
REVIEW OF RELATED LITERATURE
In order to acquire information and present findings regarding the comparison of
expenditure before and after the implementation of TRAIN Law 1, pieces of literature and
studies were gathered and analyzed to build the knowledge of the researchers and to
serve as a guide to the readers of this paper on what has already been accomplished,
studied, analyzed, and defined as of present time.
Proper Budgeting
Budgeting is basically having a plan for your money for a day, a week, a month , or
so. According to an article by Mark Canlas (2014), “It is a good idea to teach kids
budgeting skills as early as when they are high school. There is nothing more real than the
pain of a grumbling stomach to teach them about handling their finances well.” This
statement states that high school students should start learning about proper budgeting of
their allowances in preparation for college. The student should apply proper allocation of
money in order for the them to efficiently spend their money and to save money at the
same time.
According to the research about the allowance and budget of students acquired by
the students of Fine Arts and Design from the University of Santo Tomas, CFAD students
mostly spend their money on food, art supplies, and transportation. This study shows that
the budgeting of allowance does not mainly focus on personal use, but also in educational
use. The findings of this study also showed that proper budgeting of money is effective to
the majority of the students.
Personal Spending
Personal Spending is an amount of expenses an individual has accounted for
during the year. This includes spending for the needs, necessities and wants of a person.
It is a process to gain property or belongings by expending money to satisfy oneself.
The most affected system in purchasing is the Periodic system which is based on
the availability and quantity of the good needed. This system
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According to Kershaw, 2018, In university of Arts in London, with an inflation rate
of 50 per cent higher than average, college students are facing the most expensive
academic year to date.
The open university conducted a Student Price Index survey. The undergraduates in
England found that the true inflation rate is almost 7 per cent compared to the currently
stands at 4.4 per cent of Consumer Price Index.
This is on the grounds that, compared with other households, students spend more than
of their budget on things which have risen in price that is faster over these years- goods
such as food and drink, clothing, tobacco, personal care products and travel.
Before students budget these item to just 50 per cent but recently, students spend 75
per cent. In total, their living costs are rising at 1.5 times the rate of that of the general
population.
In July, the index found that in this year, the annual rate for full-time undergraduates was
6.6 per cent, and opposed to the UK household, which is 4.4 percent inflation rate.
In the side of part time students with 6.3 percent is still more than 40 per cent over the
general inflation rate. This is because they pay less in fees and spend lower proportion of
their budget on housing cost which in the past year it is one of the fastest rising
components of the cost of living.
Faster inflation for students has been a pattern for several years. In this year, although it
is still higher the gap has closed slightly because everybody has been hit by rises in food,
housing cost and transportation.
The price indices from National Statistics Consumer Price Index and the most recent
Student Income and Expenditure Survey for 2004/05, calculated the index using figures.
How Train Law Will Affect Everyone
President Duterte on December 19, 2017 signed into law the Tax Reformation for
Acceleration and Inclusion (Train) bill, the first tax reform package, for a fairer and simpler
tax system for the Filipinos, allowing it to take effect starting January 1, 2018.
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1. Increased take-home money and bonuses
Most likely the main thing that charmed natives: under the TRAIN law, specialists
with a yearly pay of P250,000 is exempted from impose. Pay rates that were once
deducted 5% to 32% in charge rate currently have 0% impose conclusion from 2018 and
past.
Assessment exclusion incorporates the ordered 13th month reward and different
rewards. This implies each worker would now be able to bring home more than they did
the earlier years. In any case, since everything is a give-and-take process, a few
merchandise will be valued higher starting now and into the future.
2. Excise on sugar-sweetened beverage and cigarettes
Exempted from this are milk products, 100% natural fruit and vegetable juices, and
ground, instant, and pre-packaged coffee products.
Sugar-sweetened beverages, once without taxes, are now P6/liter while high fructose corn
syrup beverages are at P12/liter.
3. Increase on petroleum and automobile tax
The TRAIN law forces an 8-peso increment in oil products per liter this year. For
diesel and lamp oil, the once non-existent extract expense will now be at P2.50-P3/liter.
Family unit gas LPG will have an added P1/liter. Duties in oil and gas will bit by bit
increment until 2020.
Vehicles worth P600,000 and below will have a 4% charge rate. Vehicles over
P600,000 up to P1 Million will have a 10% expansion, a 20% increase for vehicles priced
above P1 million to P4 million, and 50% for vehicles above P4 million.
Hybrid autos are burdened half and electric vehicles and pick-ups are excluded
from the rates. Assessments will increment by more than 10-20% out of 2019.
4. Estate tax, donor tax and Higher Documentary Stamp Tax
Under the TRAIN law, a flat rate of 6% will be forced on both domain and donor
tax. In the old law, the net domain value year ago went up to 20% if the estate was worth
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P200,000 or more. With the train law, estates worth P5 million and beneath will have zero
duty rate, yet P5 million or more will have 6% of the overabundance over P5 million.
5. No more tax exemption in lotto winnings and some cosmetic procedures
TRAIN law also removes the tax exemption of Lotto winnings. Beginning 2018,
winnings of more than P10,000 will be subject to 20% tax.
While the first proposal was for a 20% tax increase in some cosmetic procedures that are
for aesthetic purposes only, it was finalized to 5%. Exempted from this tax are surgeries
and procedures for correcting dysfunctional body areas and birth defects.
6. The Effect on Value Added Tax
The previous threshold of P1.9 million in Value Added Tax will now be increased to
P3 million. Some exemptions from VAT then would be small businesses with total annual
sale of less than P3 million, senior citizens and PWDs, renewable energy, and drugs and
medicines for diabetes, hypertension, and cholesterol (starting 2019). Monthly rentals up
to P15,000 is also now exempted from VAT, a welcome addition to the previous P10,000
below exemption.
7. Tax compliance will become more simple
A simplified tax filing and payment process is expected as workers with an annual
salary of P250,000 will be exempted from tax starting this year. This means workers who
fall in this bracket will now no longer have to file income tax returns (ITR). Self-employed
and professionals still have to file their ITRs for record and monitoring purposes of the
Bureau of Internal Revenue (BIR). In compliance also to this simplification, BIR will also
cut the current 12 pages of the ITR to four pages.
8. The government promises help
The government has promised a P200-a-month conditional cash transfer to poor
families to cushion the impact of the law to the poor. For the next two years this will be
increased to P300 a month.
Purchase Decision
People pay taxes to fund the public goods and services. This funding is
administered by the government officials when implementing a program for the society.
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Everyone purchasing a product or service is expected to pay taxes written in a bill, the
consumption taxes. These include the Value Added Tax, Sales Tax, and other taxes on
goods and services. According to the Secretary, General of OECD publishing,
“Consumption taxes such as VAT, sales taxes and excise duties are often categorised
indirect taxes as they are not levied directly on the person who is supposed to bear the
burden of the tax. They are rather imposed in certain transactions, products or events.
They are not imposed on income or wealth but rather on expenditure that the income and
wealth finance. Governments generally collect the tax from the producers and distributors
in the value chain, while the burden of the tax falls in principle on consumer as it will be
passed on them in the prices charged by suppliers.”
Due to an increase of tax in the different aspects of goods, consumer’s purchase decision
vary on the inflation leading to the re-evaluation of goods and products.
Building financial skills
Some parents devise a category system to help their children manage their
allowances. The first category is short-term expenses, money the child may spend right
away on whatever he or she wants. The second category is savings, money put in a
special jar, where its gradual accumulation is visible. This money is used for items the
child wants that cost more than the weekly allowance. The third category is charity, money
for church donation or a local cause, for example, or for gifts. The parents may decide
how a younger child's allowance should be divided among the three categories, or the
budgeting may be left up to an older child.
Guidelines for spending the allowance
Children need to learn that they can increase the money they have by saving it or
working for it. Parents may create a list of jobs children can do above and beyond their
regular chores, listing the amount of money the parents are willing to pay for these jobs.
Parental concerns
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Some parents stop giving allowances to their teenagers at a certain age and
encourage them to get a part-time job. Although teenagers may earn money from jobs
outside the home, they may still need parental guidance to develop correct spending
habits. They need to know how to save money and give to charity as well.
Some families put teenagers in charge of all their own expenses, so they learn to budget.
But some parents also maintain that teenagers should not take large sums of money from
their account to make important purchases such as a car or motorcycle without parental
permission.
Conceptual Framework
Before the After the
implementation implementation
of TRAIN Law of TRAIN Law
Comparison
data
Fig. 1 Conceptual model about the implementation of TRAIN Law
Research Hypotheses
Ho : There is no significant difference on the expenditure of the Senior High School student
after the implementation of TRAIN Law Package 1.
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Ha: There is a significant difference on the expenditure of the Senior High School student
after the implementation of TRAIN Law Package 1.
Definition of Terms
Package One TRAIN Law. Republic Act No. 10963 or Tax Reform for Acceleration and
Inclusion (TRAIN) addresses several weaknesses of the current tax system by lowering
and simplifying personal income taxes, simplifying estate and donor’s taxes, expanding
the value-added tax (VAT) base, adjusting oil and automobile excise taxes, and
introducing excise tax on sugar-sweetened beverages.
As a complementary measure TRAIN, Congress introduced Package 1B or the Tax
Amnesty Bill. Package 1B includes the lifting of bank secrecy laws and automatic
exchange of information and three types of amnesties (on estate tax, all unpaid internal
revenue taxes with the corresponding waiver of bank secrecy laws in the availment
thereof, and delinquencies). There are also proposals on other amnesty taxes such as
importation taxes and customs duties (Dominguez, 2017).
Transportation fee. costs incurred by an employee or self-employed taxpayer while
away from home in a travel status for business. Transportation expenses are a subset of
travel expenses, which are all costs associated with business travel, such as taxi fare,
fuel, parking fees, lodging, meals, tips, and cleaning, shipping and telephone charges that
employees may incur and claim for reimbursement. Transportation expenses are narrower
in that they refer only to the use of or cost of maintaining a car used for business, or
transport by rail, air, bus, taxi or any other means of conveyance for business purposes.
Commuting expenses (traveling from home to a workplace) are not considered a
deductible transportation expense.
Food and Beverages. All companies involved in processing raw food materials,
packaging, and distributing them. This includes fresh, prepared foods as well as packaged
foods, and alcoholic and nonalcoholic beverages.
Students. Primarily a person enrolled in a school or other educational institution who
attends classes in a course to attain the appropriate level of mastery of a subject under
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the guidance of an instructor and who devotes time outside class to do whatever activities
the instructor assigns that are necessary either for class preparation or to submit evidence
of progress towards that mastery. In the broader sense, a student is anyone who applies
themselves to the intensive intellectual engagement with some matter necessary to
master it as part of some practical affair in which such mastery is basic or decisive.
Workers. One that works especially at manual or industrial labor or with a
particular material. any of the sexually underdeveloped and usually sterile members of a
colony of social ants, bees, wasps, or termites that perform most of the labor and
protective duties of the colony
Bureau of Internal Revenue. The Bureau of Internal Revenue (Filipino: Kawanihan ng
RentasInternas, or BIR) is an agency of Department of Finance. BIR collects more than
half of the total revenues of the government.
Tax. A compulsory contribution to state revenue, levied by the government on workers'
income and business profits or added to the cost of some goods, services, and
transactions.
Government. A group of people that governs a community or unit. It sets and
administers public policy and exercises executive, political and sovereign power through
customs, institutions, and laws within a state. A government can be classified into many
types-democracy, republic, monarchy, aristocracy, and dictatorship are just a few.
Expenditure. Payment of cash or cash-equivalent for goods or services, or a charge
against available funds in settlement of an obligation as evidenced by an invoice, receipt,
voucher, or other such document
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CHAPTER 3
METHODOLOGY
Research Design
The research design to be used in conducting this research is the survey approach. The
survey approach is a method of gathering information by giving prepared questionnaires
to the people who are anticipated to have the desired data. The researcher utilized a
survey approach in conducting the research. It compares the previous tax reform law to
the new implemented TRAIN Law. Comparative research is a research methodology that
aims to make comparison.
The Sample
According to Stat Trek Dictionary, Cluster sampling refers to a type of sampling method .
With cluster sampling, the researcher divides the population into separate groups, called
clusters. Then, a simple random sample of clusters is selected from the population. The
researcher conducts analysis on data from the sampled clusters. The researcher chose
the grade 11 students of School of Saint Anthony as the respondents of this study. Cluster
Sampling will be used by the researchers wherein will divide the population into 7 sections
and 5 respondents per section.
Instrument
The instrument that will be used by the researchers to gather data will be structured
survey form to be answered by the grade 11 students in School of Saint Anthony.
Data Collection Procedure
In order to gather reliable data for the study, the researchers formulated survey
questionnaires. This questionnaire provides information about the student’s expenditures
towards transportation fees and foods & beverages. The Presidents will be assign to
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distribute the questionnaires during their vacant time. The presidents will also be the one
who would collect and return the questionnaires to the researchers.
Research Procedures
The study will consist of the following stages:
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CHAPTER 4
PRESENTATION AND ANALYSIS OF DATA
This chapter presents the findings, analysis and interpretation of data gathered by the
researchers. This study aims to compare the expenditures of the students before and after
the implementation of TRAIN law package 1. The results are taken from respondents in
School of Saint Anthony, specifically form the grade 11 students.
Figure 1. Daily allowance of students before and after the implementation of TRAIN law 1
The figure above is the statistical representation of the daily allowance of the Senior High
School students before and after the implementation of TRAIN law 1. Among the 52
participants of the research, 36% of the respondents received a daily allowance ranging
from Php 150 to Php 199 before the implementation of the law. However, when the law
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was implemented, the percentage went down to 15%. It can be observed that the lowest
percentage before the implementation of the law had a huge increase after the law was
implemented. Therefore, we can conclude that TRAIN law 1 had an impact towards the
daily allowances of the students.
Figure 2. Transportation expense of students before and after the implementation of
TRAIN law 1
The chart above shows the transportation expense of the 52 respondents before the
implementation of TRAIN law 1. Before the law was implemented, 33% of the
respondents had an average transportation expense ranging from Php 10 to Php 19.
However, after the law was implemented most of the students had a transportation
expense ranging form Php30 to Php 39. On the other hand, two of the lowest percentage
was equivalent to 8% and 9% amounting to Php 40 to Php 49 and Php 50 & above
respectively. But after the implementation of the law it had an increase of 9% and 8%. The
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transportation expense was highly influenced by the price hike of petroleum. Urging the
public transportation industry to increase their minimum fare.
Figure 3. A student’s savings in a day before and after the implementation of TRAIN law
1
Before the implementation of TRAIN law 1, most of the students can save up to Php 70 to
Php 99 from their daily allowance. While 25%of the respondents saves Php 50 & below.
But after the law was implemented, 54% of the respondents only saves up to Php &
below. The chart clearly shows that due to the increase of public transportation expenses
and food expenses, the students did not have much to save.
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Figure 4. Student’s expenditure on food and beverages before and after the
implementation of TRAIN law 1
In this figure, 46% of the students spend their money around Php 50 and above. 28% of
the respondents manage to spend their money on food ranging from Php 20-29. And 17%
of the students spend their money around Php 30-49. Some of the students still manage
to spend Php 10-19 on food and beverages before the implementation of TRAIN law 1. It
clearly shows that before implementing the law, students manage to spend their money on
food averagely. But when the law was implemented 66% of the students spend their
money on food and beverages around Php 50 and above. And only 2% of the students
spend Php 10-19 on their food. It clearly shows that it really affects the students in
spending their money on food by TRAIN law 1 due to excise tax on sweetened beverages.
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CHAPTER 5
SUMMARY, CONCLUSION AND RECOMMENDATION
Summary
This study was conducted for the purpose of figuring out the difference between
the expenses of Senior High School students of School of Saint Anthony before the
implementation of TRAIN LAW 1. Online survey in Google docs were used to gather data.
A total of 50 Grade 11 students of School of Saint Anthony were able to answer the
questionnaires provided by the researchers.
The findings of the study are:
1. The daily allowance of the students before ranges from Php 150-199 but
after the implementation of TRAIN LAW 1, some of the student’s
allowances increase to 200-249 but some of them also decreases to 100-
149.
2. For the transportation allowance, 33% of the respondents had an average
of Php 10-19. There was no change after the implementation of TRAIN
LAW 1.
3. Most of the students can save up to Php 50 and above unlike before of Php
70-99.
4. Also, the 46.0% spend Php 50 and above on food and beverages but after
the implementation of TRAIN LAW 1, 66.0% of the respondents said that
they spend Php 50 and above.
Conclusion
The research has been conducted to figure out the difference between the expenses of
the Senior High School Students before and after the implementation of TRAIN Law 1.
Based on the findings, there is an increase to the food and beverages and the student’s
daily allowance, a decrease of amount on the savings of the students, and the
transportation fee remains.
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The researchers agreed that the Train law have a massive impact on students’
expenses. There is no exemption made by the law in the inflation of expenses. Although
the government gives discounts on students, it still doesn’t suffice for every price increase.
Recommendations
The researchers have developed the following recommendation based on the data and
conclusions gathered.
1. The researchers can improve this research by adding a table which shows the
difference before and after the implementation of TRAIN Law 1.
2. The future researchers as well can improve this study by enumerating the people
can be affected and the factors that might change.
3. based on the findings, the implementation of TRAIN law 1 greatly affected the
expenditures hence the researchers recommend the students to properly allocate
their money.
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