Beruflich Dokumente
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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
SALIENT 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.
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.
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.
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.
o Exceptions in tax code: cooperatives (except electric cooperatives), VAT on medicines for diabetes, high cholesterol, and
hypertension, and condominium and association dues
o Exceptions in special laws: PAGCOR and casino, domestic coal, renewable energy, credit surety, countryside barangay
business enterprise, mini-hydro, and tourism
o Starting 2021, move from final to creditable withholding VAT
o Starting in 2022, move from five-year spreading of capital input VAT to immediate expensing.
o Starting 2023, move from monthly to quarterly VAT filing and payment.
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.
o In 2018, gasoline excise tax (including additional VAT) rose by only PHP 2.97 per liter.
o In 2018, diesel excise tax (including additional VAT) rose by only PHP 2.8 per liter. This should not warrant a fare hike.
o PUV operators and drivers can avail of social assistance program.
Adjustment of automobile tax rates is based on the net manufacturing or importer’s price, which is as follows:
Pick-ups and purely electric vehicles are fully exempt, while hybrid cars are taxed at 50 percent of the equivalent automobile.
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
o Mining excise tax – double the rates from two percent to four percent.
o 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.
o Cosmetic excise tax – a new tax at five percent of gross receipts.
o Documentary stamp tax – 50 to 100 percent increase except for property, savings, and non-life insurance.
o Foreign currency deposit unit (FCDU) – increased from 7.5 percent to 15 percent final tax on interest income.
o Capital gains of non-traded stock – increased from five to ten percent, to 15 percent final tax on net gains.
o Stock transaction tax – increased from 0.5 percent to 0.6 percent of the transaction value.
Effective January 1, 2019, people can start availing of VAT-exempt medicine for diabetes, high cholesterol, and hypertension
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:
HEALTHCARE
With better revenues, we can now invest in better quality healthcare services. With this, TRAIN aims to:
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:
To help Filipinos cope with the changes brought about by TRAIN, the following measures were implemented:
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.
o As of May 28, 2019, around PHP 518 million-worth of fuel cards were distributed to 103,567 beneficiaries.