GE- READINGS TTH 2:30PM-4:00PM

SUGGESTED CLASS ACTIVITIES P.173

JOSE RIZAL MEMORIAL STATE UNIVERSITY

The Premier University in Zamboanga Del Norte

Katipunan Campus

BACHELOR OF ELEMENTARY EDUCATION 1ST YEAR BLOCK A

ANSWERED BY:

CYNICAREL MAE GESTOPA

NJ CEDILLO LUNJAS

MARIA VIOLERIENA MANALIM

NOVEMBER 07,2021
  GROUP YOURSELVES INTO 3 AND RESEARCH ABOUT TRAINLAW.

#1. What are the salient features of RA.10963?

GROUP ANSWER:

The Tax Reform for Acceleration and Inclusion Law (TRAIN Law),
officially designated 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. 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. This package introduced changes in
personal income tax (PIT),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.

PACKAGE 1: TRAIN

The Tax Reform for Acceleration and Inclusion (TRAIN) under the Comprehensive Tax
Reform Program seeks to correct a number of deficiencies in the tax system to make it
simpler, fairer, and more efficient.

Specifically, TRAIN corrects the longstanding inequity of the tax system by reducing
income taxes for 99 percent of income taxpayers, thereby giving them much-needed relief
after 20 years of non-adjustment. It also raises significant revenues to fund the President’s
priority infrastructure programs to reduce poverty incidence from 21.6 percent in 2015 to 14
percent by 2022.

70 percent of the incremental revenues of TRAIN will go to infrastructure and the

Build, Build, Build program, while the balance will go to social services programs. In TRAIN,
Congress passed two-thirds of the needed revenue for 2018 and is expected to pass the
balance in 2018 to help achieve our revenue and deficit targets.
 LEGISLATIVE STATUS Republic Act No. 10963 Passed into law on 19 December
2017SALIENT PROVISIONS LOWERED AND SIMPLIFIED PERSONAL INCOME TAXES

Under TRAIN, those with annual taxable income below PHP 250,000 are now exempt
from paying personal income tax, while the rest of taxpayers, except the richest, will see
lower tax rates ranging from 15 percent to 30 percent by 2023. To maintain progressivity, the
top individual taxpayers whose annual taxable income exceeds PHP 8 million face a higher
tax rate of 35 percent from the current 32 percent.

SIMPLIFIED TAX FOR SMALL AND MICRO SELF-EMPLOYED AND PROFESSIONAL (SEPS)
TAXPAYERS

Small and micro SEPs now have the option to pay a simpler, flat tax of eight percent
on gross sales in lieu of the income and percentage tax. Taxpayers can save time falling in line
and filing and paying eight times a year to just four times a year.

UNCONDITIONAL CASH TRANSFERS

The ten million poorest households and individuals receive cash transfers of PHP 200
per month in 2018 and PHP 300 per month in 2019 and 2020. The amount is enough to offset
the moderate but temporary increase in prices due to TRAIN.

SIMPLIFIED ESTATE AND DONOR’S TAXES

Estate tax is lowered from 20 percent to a single rate of six percent for net estate with
standard deduction of PHP 5 million as well as exemption for the first PHP 10 million for the
family home. On the other hand, donor’s taxes are lowered from up to 15 percent to a single
rate of six percent of net donations above PHP 250,000 percent yearly.

EXPANDED THE VALUE-ADDED TAX (VAT) BASE

Fifty-four special laws with non-essential VAT exemptions were repealed, thereby
making the VAT system fairer. For the average Filipino, this does not have an impact on them,
as the VAT exemption removal only affects groups enjoying exemptions.

Exceptions in tax code: cooperatives (except electric cooperatives)

VAT on medicines for diabetes, high cholesterol, and hypertension, and condominium
and association dues

Exceptions in special laws: PAGCOR and casino, domestic coal, renewable energy,
credit surety, countryside barangay business enterprise, mini-hydro, and tourism.
 Starting 2021, move from final to creditable withholding VAT.Starting in 2022, move
from five-year spreading of capital input VAT to immediate expensing.Starting 2023, move
from monthly to quarterly VAT filing and payment.

ADJUSTED OIL EXCISE TAXES

There was a staggered increase of oil excise tax by up to PHP 6 per liter over a three-
year period, with lower rates for essentials such as diesel, kerosene, and LPG to protect
households and commuters.

In 2018, gasoline excise tax (including additional VAT) rose by only PHP 2.97 per liter.
In 2018, diesel excise tax (including additional VAT) rose by only PHP 2.8 per liter. This should
not warrant a fare hike. PUV operators and drivers can avail of social assistance program.

ADJUSTED AUTOMOBILE EXCISE TAXES

Adjustment of automobile tax rates is based on the net manufacturing or importer’s

price, which is as follows:

Four percent (for automobiles up to PHP 600,000)

10 percent (for automobiles above PHP 600,000 to 1 million)

20 percent (for automobiles above PHP 1 million to 4 million)

50 percent (for automobiles above PHP 4 million).

Pick-ups and purely electric vehicles are fully exempt, while hybrid cars are taxed at 50
percent of the equivalent automobile.

INTRODUCED EXCISE TAX ON SWEETENED BEVERAGES

PHP 6 per liter for drinks containing caloric or non-caloric sweetener, and PHP 12 per
liter for drinks containing high-fructose corn syrup or combination. 3-in-1 coffee and milk,
among others, are exempt.

OTHER TAXES

Mining excise tax – double the rates from two percent to four percent.

Tobacco excise tax – increase the rate from PHP 31.2 per pack in 2018 to P 32.5
between January to June 2018, PHP 35 per pack from July 2018 to December 2019, PHP 37.5
per pack in 2020 and 2021, and PHP 40 per pack in 2022 and 2023, followed by annual
indexation of four percent.
 Cosmetic excise tax – a new tax at five percent of gross receipts.

Documentary stamp tax – 50 to 100 percent increase except for property, savings, and
non-life insurance.

Foreign currency deposit unit (FCDU) – increased from 7.5 percent to 15 percent final
tax on interest income.

Capital gains of non-traded stock – increased from five to ten percent, to 15 percent
final tax on net gains.

Stock transaction tax – increased from 0.5 percent to 0.6 percent of the transaction
value.

In EDUCATION

TRAIN aims to create a more conducive learning environment with the ideal teacher-
to-student ratio and classroom-to-student ratio. With this, TRAIN aims to:

Achieve 100 percent enrollment and completion rates

Build 113,554 more classrooms

Hire 181,980 more teachers between 2017 and 2020

HEALTHCARE

With better revenues, we can now invest in better quality healthcare services. With
this, TRAIN aims to:

Upgrade 704 local hospitals and establish 25 local hospitals

Achieve 100 percent Philhealth coverage and higher quality of services

Upgrade and/or relocate 263 rural and urban health units to disaster-resilient facilities

Build 15,988 new barangay health stations

Build 2,424 new rural health units and urban health centers

Between 2017 and 2022, hire an additional 2,424 doctors, 29,466 nurses, 1,114
dentists, 3,288 pharmacists, 2,682 medical technologists, 911 public health associates, and
2,497 UHC implementers.
 INFRASTRUCTURE

Additional revenues collected are used to fund projects of the Build, Build, Build
program of the Department of Public Works and Highways (DPWH). Major projects are:

Bonifacio Global City-Ortigas Center Link Road

UP-Miriam-Ateneo Viaduct along C-5/Katipunan

Camarines Sur/Albay Diversion Road

Pulilan-Baliuag Diversion Road

Maasin City Coastal Bypass Road cum Sea Wall

Tacloban City By-Pass Road

Panay East-West Road

Daang Maharlika (Alternate Route) (NRJ-Mayor Democrito D. Plaza II Avenue-Las

Nieves-Sibagat), (Mandamo-Las Nieves Section)

Cagayan De Oro Diversion Road, Cagayan De Oro City

Valencia City-Pangantucan Diversion Road

Concretize 3,741 km of national gravel roads, 10,473 km of national asphalt roads,

30,209 km of local gravel roads

Irrigate 1.3 million hectares of land

Provide 7,834 isolated barangays and 23,293 isolated sitios with road access

SOCIAL MITIGATING MEASURES

To help Filipinos cope with the changes brought about by TRAIN, the following
measures were implemented:

Unconditional Cash Transfers (UCT)

UCT is a cash subsidy provided under TRAIN to alleviate the impact of fuel excise
increase on the poorest 10 million households or individuals.

As of April 12, 2019, more than PHP 22 billion has been distributed to more than nine
million beneficiaries.
 PANTAWID PASADA PROGRAM (PPP)

The PPP distributed fuel vouchers to qualified franchise holders of public utility
jeepneys (PUJs) to partially offset the impact of higher excise taxes on fuel products as well as
to partially compensate for the decrease in income brought by the fare discounts.

As of May 28, 2019, around PHP 518 million-worth of fuel cards were distributed to
103,567 beneficiaries.

#2 REFLECTION PAPER ABOUT OUR STAND ON THE TRAIN LAW

Our Stand on the TRAIN Law

In our understanding of TRAIN Law, it is aimed to generate revenue to achieve the

2022 and 2024 vision of the Duterte administration,namely,to eradicate extreme poverty, to
create inclusive institutions that will often equal opportunities to all,and to achieve higher
income country status. We are not against with it because it has positive effects TRAIN Law
may provide to our economy, namely, helping elevate the middle class, while potentially
enabling both universal health care program in the Philippines and the greater unconditional
cash transfer fund to poor income households.

But sometimes we are against about TRAIN Law because of the taxes,TRAIN hurts the
poor chiefly because of its higher excise taxes and the faster rise of prices it causes.Fewer VAT
exemptions and higher excise taxes will push up the prices of food and transportation and this
will eat away at peoples take-home pay.
 #3 WHAT IS THE MEANING OF THE PHRASE “THE POWER TO TAX
IS THE POWER TO DESTROY?” EXPLAIN YOUR ANSWER BY PROVIDING
REAL LIFE EXAMPLES.
The power to tax is the power to destroy" this phrase means that only in the sense
that those who have power can misuse it. The term is ordinarily used to express the exercise
of the sovereign power to raise revenue in fact; The power of taxation may be defined as the
power. Sales taxes on goods produced, bought, and sold entirely within a state are one real-
life examples of the said phrase. Sales taxes are indirect taxes, which the federal government
may not impose without apportionment.

Our Real Life Example to this is our country. Some of us know how corrupt other
politicians and selfish. They can really do everything even if it’s bad just to fulfill their
intentions. This is to remind that we should vote wisely elect the right person who we can
trust in terms of taxes or money.

#4 DISTINGUISH TAXATION FROM THE OTHER INHERENT POWERS OF STATE .

CITE 5 DIFFERENCES.
The Inherent powers of the state are as follows:

Power of Taxation

Police Power

Power of Eminent Domain

Inherent defined:

As being inherent, it means that as long as the state exists, this power can never be
taken away.

1. Power of Taxation – An inherent power of the state exercised through legislature,

to impose burdens upon subjects and objects within its jurisdiction, for the
purpose of raising revenues to carry out the legitimate objects of the government.
 Nature: An inherent power of the state exercised through the legislature.

Scope: To impose burdens upon subjects and objects within its jurisdiction.

Purpose: For raising revenue to carry out the legitimate objects of the government

Revenue Objective – To build a just and human society and the establishment of a
government under certain ideals and aspirations.

Sumptuary Objective – An implement of the police power of the state for regulatory
purposes. In this case, it is used in furtherance of any government objective either as an
incentive or deterrence. As an implement, the generation of revenue is merely incidental or in
furtherance thereof. (Lutz v. Araneta, 98 Phil 148).

Compensatory Objective – For social justice purposes or other purposes or other

legitimate objectives of the State, with a view to realize social justice, equitable distribution
of wealth, economic progress and other similar objectives (Southern Cross Cement Corp. v.
Cement Manufacturers Assoc. of the Phils, GR 158540)

2. Police Power –

This is the power vested in the Legislature by the Constitution to make,

ordain,and establish all manner of wholesome and reasonable laws, statutes and
ordinances, either with penalties or without, not repugnant to the Constitution, for the
good and welfare of the State and its subjects.

Basis: This power is based on the legal maxim “salus populi est suprema lex” (the voice
of the people is the supreme law). Every citizen of every community, in a civilized
society must bear certain burdens imposed for the good of all.Note:

No right is absolute in the face of the common good.

Nature:
 Police power is an attribute of sovereignty and founded on the obligation of the
State to provide protection for its citizens and the safety and good order of society.

Scope:

Police power is founded on which our social system rests and has for its object the
improvement of social and economic conditions affecting the community. It depends on the
security of the social order, life and health of citizens, comfort and existence in a thickly
populated community, enjoyment of social life, and beneficial use of property.

Requisites:

1. Interest of the public is general, not that of pa particular class

2. Means used are reasonably necessary for the purpose, and not unduly oppressive
upon individuals

2. Power of Eminent Domain – This is the right of the State to acquire private
property for public use upon payment of just compensation and observance of
due process.

Basis: It is based on genuine necessity and that necessity must be of public

character. It must be reasonable and practicable such that it would greatly
benefit the public with the least inconvenience and expense to the condemning
party ad property owner consistent with such benefit.

Requisites:

1. There must be taking of public property

2. It must be for public use

3. There must be just compensation

4. Due process of law must be observed in taking of the of property

5 DIFFERENCES
 #1 Police power is the power of the State to enact legislation
that may interfere with personal liberty or property in order to
promote the general welfare,39 while the power of taxation is the
power to levy taxes to be used for public purpose.

#2 Eminent domain is an inherent power of the state and federal

governments. Whereas eminent domain involves the taking of
property for public use, the police power involves regulating the use of
property to prevent harm to the public interest.

#3There are three inherent powers of government by which the

state interferes with the property rights, namely- (1) police power, (2)
eminent domain, [and] (3) taxation. These are said to exist
independently of the Constitution as necessary attributes of
sovereignty.

#4Power Taxation said to be the strongest powers among the

inherent powers of the state. Admittedly, the power to tax is an
attribute of sovereignty and is inherent in the State. It is the power by
which the sovereign raises revenue that constitutes the very
"lifeblood" of the government.

#5 The police power regulate both liberty and property. the

power of eminent domain and the power of taxation affect only
property rights .The police power and power of taxation maybe
exercise only by the government. The power of eminent domain
maybe exercise by private entities.

THANKYOU AND GODBLESS :)