Atienza, Micah Yurielle P.

Bestudio, Ryla Neña C.

Canosa, Japs

Macasinag, Xuselle T.

Reyes, Rafael

Taloma, Sinjin Joshua M.

1A - Legal Writing

The Effects of the Train Law

Having discussed a little bit about both Train Law packages during one of our

blockmate’s class in Fiscal Studies under Ms. Avila-Bato, who is a member of the

Department of Finance, he was given a very enlightening lecture on the reasons behind

the implementation of the Train Law Package 1.

We chose this topic because of how we perceive that the implementation of the

Train Law 1 is not as beneficial as it is presented to be.

The Tax Reform for Acceleration and Inclusion, also known as the TRAIN Law Act,

prescribes the revised table for the withholding tax on the compensation of incomes. It

aims to make the Tax System in the Philippines more efficient in promoting investments,

creating more jobs and reducing poverty.

TRAIN Law consists of lowering the Personal Income Tax of all the taxpayers,

simplifying the Estate and Donor’s Tax, expanding the Value-Added tax Base, increasing

the Excise Tax of Petroleum Products, increasing the Excise Tax of Automobiles and

introducing the Tax of Sugar-Sweetened Beverages.

In line with this, the Comprehensive Tax Reform Program (CRRP) aims to raise

revenues that will be used to fund the President's Build, Build, Build Program that will

sustain inclusive growth in the country. One of TRAIN Law's importance is the lowering

of the personal income tax, wherein subsequent regulations also clarified certain portions

of the personal income tax, specifically the optional 8 percent rate.

 On paper, the projections presented by my professor seemed like it would be

instantaneously beneficial toward the lower-class citizens. The Train Law 1 provides for

lower income tax rates and a revamped set of tax brackets, but at the expense of higher

excise taxes to be implemented by the Government. The benefits, however, only apply to

the lower-class citizens who are employed at least under minimum wage. Those with no

fixed wages such as piece-rate workers or sari-sari store owners do not enjoy the benefits

of lower income tax rates but share in the burden of higher excises taxes.

The result of such implementation is that the members of the community who are

not affected by the lowered income tax rates, who are already struggling to make ends

meet, are given a harder time as the prices of their necessities increased. The Train Law

1 should have been adjusted more carefully as to alleviate the burden placed on the

already struggling lower-class who are not affected by the positives of the statute but must

share in the burden of the negative effect of the same.