Last December 9, 2017, President Rodrigo Duterte signed Republic Act 10963 or Tax Reform for

Acceleration and Inclusion also known as the TRAIN law, the first package of the Comprehensive
Tax Reform Program.

The TRAIN provides a huge income tax cuts for majority of Filipino taxpayers while raising
additional funds to help support the government’s accelerated spending on its “Build, Build,
Build” and social services programs. It includes essential features such as lowering of personal
income tax rates, simplifying estate and donor taxes, simplified Value-Added Tax system,
increasing excise taxes on petroleum products and automobiles, and introduction of taxes for
sugar-sweetened beverages. With this, the law making body believes that the TRAIN Law corrects
the longstanding inequity of the tax system by reducing personal income taxes for 99 percent of
taxpayers, thereby giving them the much needed relief after 20 years of non-adjustment of the tax
rates and brackets. At the same time, the TRAIN wants to correct a number of deficiencies in the
tax system to be simpler, fairer and efficient tax system. But, if you're going to look the way the
government impose it, there are many loopholes and problems which affects the lives of many
Filipino people particularly the poor ones. That is why, TRAIN Law must be suspended.

I have three arguments why TRAIN Law needs to be suspended. First, the lowering of personal
income has no effect to a minimum wage earner employee. Second, the increase on excise tax for
petroleum products increases the price of basic commodities which is a drawback for drivers,
farmers and poor people. Lastly, TRAIN Law is an anti-poor program.

For my first argument, TRAIN Law has lowered taxes for personal income. For employees who
earned an annual income of Php 250,000 and below are exempted from paying taxes.
Professionals no longer have to file and pay the percentage tax. Instead they are charged a
withholding tax of 8% flat rate on gross sales or receipts. Self-employed professionals earning
annual income of P3 million and below may choose to pay the 8% flat tax or follow the personal
income tax table. At the same time, the 13th month pay and bonuses paid to employees that
amount to P90,000 or below will not be taxed. On the other hand, the effects of increased in excise
taxes also increases the prices of commodities. Therefore, for a minimum wage earner, even
though he is exempted from paying taxes, their income is less enough to sustain their daily
consumption. The TRAIN no longer benefits the poor but have put more burden to them.

The increase on excise tax for petroleun products had also led to double rate of taxes compared to
their previous rates. Liquefied Petroleum Gas or LPG which wasn't charge previously is currently
charged with an excise tax of Php 1.00 per liter and will be charge Php 2.00 per liter in 2019 and
Php 3.00 per liter in 2020. Diesel has no charges before but now it is taxed Php 2.50 per liter and
Php 4.50 per liter in 2019 and Php 6.00 per liter in 2020. Before, the excise tax of gasoline for
both regular and unleaded is Php 4.35 per liter. Due to TRAIN Law, the excise tax on gasoline is
currently at Php 7.00 per liter and will become Php 9.00 per liter in 2019 and Php 10.00 per liter in
2020. The higher tax rates for petroleum lessen opportunities for a typical Filipino. This directly
affects jeepney drivers, farmers, and the poor ones. It tremendously affects their livelihood and is
a burden for their part. Increase in petroleum products also increases the price of goods and
services which means their capability to earn and to avail goods and services were lessen. This is a
drawback for an individual whose capable of earning minimal amount.

Lastly, TRAIN Law is basically anti-poor. Increase in taxes has increased prices for basic
commodities. Government itself knows that a typical Filipino can barely eat three full meals today
how much more could happen due to an increase in prices of commodities. Despite of the fact that
rich people pay higher taxes compared to the poor ones, still it doesn't justify the fact that poor
people are less capable compared to them.

The government must push through the suspension of TRAIN Law, revisit the program and
modify some of their platforms. In that way, it will become more realistic for the government to
achieve a simpler, fairer and efficient tax system.