Are we ready to ride the TRAIN?
As soon as the Philippines welcomed 2018, so is the start of the implementation of the redesigned tax system- the TRAIN Law.
TRAIN or known as the Tax Reform for Acceleration and Inclusion (RA 10963) is the first known package of the Comprehensive Tax Reform Program of the Philippine government. It was proposed last year and was enacted by President Rodrigo R. Duterte last December 2017. And by January 2018, the TRAIN law took effect which is expected to make our tax system, simpler, fairer and more efficient.
But what’s in it for us? Talking about tax personally caused me to have a migraine and to some, it’s such a pain in the arse. Well…not until I have attended my first bloggers and influencers’ night last March 17, 2018, hosted by the Department of Finance at the Marco Polo hotel.
New PH Tax System – More Beneficial for Filipinos
The talk was given by Usec. Karl Chua and Director Mitch Abdon, discussing in details about the TRAIN Law and the other Comprehensive Tax Reform Programs.
But before this said event, I was able to attend the same forum but it was hosted by Philam Life last February and because I was invited by my friend Melanie and thank God that I had a brief knowledge of the TRAIN law which was explained by Mon Abrea, Founding President of CSR Philippines and author of the #AskTheTaxWhiz book.
Anyway, going back, this redesigned tax system as they said will be simpler, fairer, efficient and as well beneficial for all Filipinos. Why? Because of these two reasons (see infographic below):
With that being said, personally, I couldn’t be much happier. As a professional with an income that’s sustainable, I can definitely say that I will be taxed less than before. Also, it’s even more easy to understand now the rationale why we are being taxed…because honestly, I’m also one of those who doesn’t have in-depth knowledge of the “whats and whys” about tax. That’s why it’s better to be educated about our tax system.
Comprehensive Tax Reform Program as Packages
Mr. Chua also added that Filipinos shouldn’t be afraid of the new tax system. The taxes we pay are to fund the government’s programs e.g. the Build, Build, Build program which rolls out 75 projects that will modernize the country’s infrastructures and as well social welfare programs that will benefit the poor and near-poor households.
Though some feel dubious about this redesigned tax system, with an assumption that it will add more burden to the low-income earners, Usec. Chua said not to worry and that there are 3 simple ways to appreciate this new tax system:
- Look at tax reform in packages,
- Look not only at the revenue perspective but about the expenditure as well, and
- The investments in the future envisioned by our government
As mentioned, the CTRP is wrapped up in 5 packages:
- Package 1 – relatively revolves around decreasing the taxes on personal income (except for the high-income earners), estate, and donation. On the other hand, it increases the tax rates on certain passive income, excise tax on sweetened beverages, petroleum products, minerals, automobiles, and cigarettes.
- Package 2 – is now set in motion and submitted by DOF in the Congress. It proposes a gradual lower income tax rates in the corporate sectors. It also modernizes incentives for companies by making perks: performance-based, targeted, time-bound and transparent ( via #AskTheTaxWhiz Train Edition).
- Package 3 – Tax contribution from assets and real estates.
- Package 4 – An increase in the percentage tax for the passive and investment income on sales of shares listed in the stock exchange.
- Package 5 – Increase tax imposition for the alcohol and cigarette consumers, miners, gamblers – which is also known as Sin tax or sumptuary tax – which are considered to have negative effects in personal lifestyle and society.
Now, is this something promising? YES IT IS!
With this very detailed information provided by our the current government about the tax reform, I can say that it has a huge positive impact to every Filipinos. It is very wise that all of us should take advantage to learn about our tax system and as well what our current government envisions for our country to prosper.
For more information about taxes, visit DOF’s website and social media pages:
- Website: https://www.dof.gov.ph
- Facebook Page: facebook.com/DOFPH
- Twitter Page: https://twitter.com/dof_ph