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    Reflection Paper 1

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    Ciim Pathy
    The document discusses the disadvantages of implementing the TRAIN Law in the Philippines. It was signed into law by President Duterte in 2017 as the first part of a comprehensive tax reform program. While intended to help the poor, critics argue that TRAIN will actually burden the bottom sectors through taxes on sugary drinks and higher costs of basic goods. Studies show that TRAIN has worsened poverty and inequality in the Philippines by raising prices on commodities beyond what the poor can afford. The aims of improving lives and progressive taxation have been undermined, leaving Filipinos worse off overall.

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    Reflection Paper 1

    Uploaded by

    Ciim Pathy
    473 views2 pages
    The document discusses the disadvantages of implementing the TRAIN Law in the Philippines. It was signed into law by President Duterte in 2017 as the first part of a comprehensive tax reform program. While intended to help the poor, critics argue that TRAIN will actually burden the bottom sectors through taxes on sugary drinks and higher costs of basic goods. Studies show that TRAIN has worsened poverty and inequality in the Philippines by raising prices on commodities beyond what the poor can afford. The aims of improving lives and progressive taxation have been undermined, leaving Filipinos worse off overall.

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    The document discusses the disadvantages of implementing the TRAIN Law in the Philippines. It was signed into law by President Duterte in 2017 as the first part of a comprehensive tax reform program. While intended to help the poor, critics argue that TRAIN will actually burden the bottom sectors through taxes on sugary drinks and higher costs of basic goods. Studies show that TRAIN has worsened poverty and inequality in the Philippines by raising prices on commodities beyond what the poor can afford. The aims of improving lives and progressive taxation have been undermined, leaving Filipinos worse off overall.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    473 views2 pages

    Reflection Paper 1

    Uploaded by

    Ciim Pathy
    The document discusses the disadvantages of implementing the TRAIN Law in the Philippines. It was signed into law by President Duterte in 2017 as the first part of a comprehensive tax reform program. While intended to help the poor, critics argue that TRAIN will actually burden the bottom sectors through taxes on sugary drinks and higher costs of basic goods. Studies show that TRAIN has worsened poverty and inequality in the Philippines by raising prices on commodities beyond what the poor can afford. The aims of improving lives and progressive taxation have been undermined, leaving Filipinos worse off overall.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Although there are some advantages, implementing TRAIN Law has many disadvantages

    and should not be part of the system of every Filipino, for us not to lose the quality of health,
    education, and most especially life that we have. Last December 19, 2017, President Rodrigo R.
    Duterte approved the suffering of today's Philippines' poor and oppressed with a cohesive
    version of the bill on both Houses. The Republic Act No. 10963 is known as the Tax Reform for
    Acceleration and Inclusion (TRAIN) Act, the first package of the Comprehensive Tax Reform
    Program (CTRP) that was envisioned by the Duterte Administration. The Republic Act seeks to
    create a more "efficient and effective" tax collection mechanism. According to the Department of
    Finance (DOF), It will set the staging ground to rescue 21 million Filipinos from poverty in the
    long run because additional revenues from this law will allow the government to spend more on
    health, education, and other social services that will provide opportunities for prosperity to all
    Filipinos. But the said act technically and constitutionally lowers the Personal Income Tax (PIT),
    simplifies both the Estate and Donor’s tax and the Value-Added Tax (VAT) System, increases
    the excise tax of automobiles, and petroleum products, and worst of all, on the sweetened
    beverages.

    For the poor, they’re at a big disadvantage because their earnings are not taxed; hence,
    any change in the tax rates won’t provide an impact. Price adjustments, increasing tax rates, and
    transportation fares, and commodities, on the other hand, would have a significant impact on
    people. As a response, Filipino workers have protested about the country's high tax rates, despite
    getting what they consider to be inadequate public services. TRAIN is widely criticized for its
    alleged adverse effect on the poor, especially the claim that implementing it would result in
    higher prices. The following are just some of the major potential negative impacts. First, excise
    taxes on sugar-sweetened drinks will burden the bottom sectors, particularly those who are
    already tax-exempt under the current taxation system and therefore will not benefit from the
    lowered tax rates and there will be higher property taxes due to higher property valuation.
    Second, the VAT on low-rental housing may lead to higher rental costs. Third, investors who are
    looking to benefit from PEZA (Philippine Economic Zone Authority) incentives may be
    discouraged by the removal or restructuring of some of these incentives. Fourth, while for small
    businesses like sari-sari stores, being taxed on gross income rather than net income (computed
    after expenses) can mean higher tax payments, Lastly, inflationary effects of higher petroleum
    prices are seen to mostly affect the bottom 60% of households. The government plans to
    counteract these effects with a "transfer scheme" that will divert about P30 billion from
    petroleum excise taxes to help the poor. However, this plan has been denounced as unsustainable
    (it is expected to last only one to four years) and a "logistical nightmare." While some sectors
    have welcomed the initiative, others have criticized it, arguing that it could have a negative
    impact on the lowest earners. According to Punongbayan (2019), “when inflation shot up to
    record highs – two studies by researchers at the Philippine Institute for Development Studies
    (PIDS) show that TRAIN worsened the plight of millions of Filipinos.” The tax reform program
    TRAIN will provide a significant impact on an average wage Filipino earner as adjusting excise
    taxes would raise the prices of some commodities faced by Filipino consumers thus, the TRAIN
    Law contradicts progressive and pro-poor taxation. The aim to lower taxes for the poor and
    improve the quality of life of the Filipino citizens was negated by the government’s drive to
    increase revenues. Instead of easing the burden of over-taxation, the TRAIN Law worsens the
    misery of Filipinos.

    References
    Punongbayan, J. (2019). [ANALYSIS] How the TRAIN law worsened poverty, inequality.
    Retrieved March 18, 2021, from the URL: https://www.rappler.com/voices/thought-leaders/how-
    tax-reform-law-worsened-poverty-inequality-philippines

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