CHAPTER 9 – EVOLUTION OF TAXATION IN THE PHILIPPINES
Activity 9: TRAIN Law
Explain the impact of Republic Act No. 10963 (TRAIN Law) to the prices of
goods and
services and to the live of the Filipino people. Write 3-4 paragraph. Back up
your
explanation with factual information.
The Tax Reform for Acceleration and Inclusion (TRAIN) Law, also known as
Republic Act No. 10963, is a comprehensive tax reform program that
has been put into place in the Philippines. The goal of the law was to
increase government income while advancing simplicity and fairness in the
tax code. There are various approaches to examine how the TRAIN Law
affects the cost of products and services as well as the life of Filipinos:
1. Consumer Prices: The TRAIN Law's possible effect on product and service
prices was
one of the main issues brought up. Higher excise taxes were imposed by the
bill on a number of goods, including cars, sugar-filled beverages, and
petroleum items. The purpose of these taxes was to raise money for the
government, but they might also have an impact on how much these things
cost. This led to price rises for certain consumer goods and services, which
may have an effect on the cost of living for Filipinos.
2. Inflation: The Philippines' total inflation rate was impacted by the TRAIN
Law's adoption. Inflation rose in the months after the law went into effect, in
part because of increasing excise taxes on goods and services. Growing
inflation may negatively affect customers' purchasing power, especially
for low-income people and families that depend on essential goods and
services.
3. Income Tax Rates: In an effort to lower taxes for low- and middle-
class people, the TRAIN Law also changed the income tax rates in the
Philippines. Many Filipinos saw their income tax burden reduced as a result of
the reform, which raised the tax-exempt threshold and changed the tax
brackets. The goal of this modification in income tax rates was to
increase people's discretionary income, which could have a good effect on
their life.
4. Social Mitigation Measures: Several social mitigating measures were put in
place by the Philippine government to mitigate the possible effects of the
TRAIN Law on disadvantaged sectors. These included targeted subsidies for
public utility jeepney operators, unconditional cash transfers (UCT) to eligible
households, and other initiatives designed to safeguard and support low-
income individuals and families.
All things considered, the TRAIN Law's effects on the costs of goods and
services as well
as the lives of Filipinos are intricate and varied. The law had an impact on
consumer prices and
inflation even though its main goals were to increase revenue and advance
tax justice. Depending
on personal circumstances and socioeconomic considerations, the impact
can vary in degree. It is
critical to take into account the advantages and disadvantages that
the TRAIN Law and its
implementing regulations would have on various societal groups.
