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| Tax Reform for Acceleration and Inclusion Law | |
|---|---|
 | |
| Congress of the Philippines | |
| |
| Citation | Republic Act No. 10963 |
| Territorial extent | Philippines |
| Enacted by | House of Representatives |
| Enacted | December 14, 2017 |
| Enacted by | Senate |
| Enacted | December 13, 2017 |
| Commenced | January 1, 2018 |
| Legislative history | |
| First chamber: House of Representatives | |
| Bill title | House Bill No. 5636 |
| Introduced by | Dakila Cua |
| Introduced | May 15, 2017 |
| First reading | May 15, 2017 |
| Second reading | May 31, 2017 |
| Third reading | May 31, 2017 |
| Committee report | Committee Report No. 229 |
| Second chamber: Senate | |
| Bill title | Senate Bill No. 1592 |
| Received from the House of Representatives | September 20, 2017 |
| Member(s) in charge | Aquilino Pimentel III |
| First reading | September 20, 2017 |
| Second reading | November 28, 2017 |
| Third reading | November 28, 2017 |
| Committee report | Committee Report No. 164 |
| Status: In force | |
The Tax Reform for Acceleration and Inclusion Law (TRAIN Law),[1] officially designated as Republic Act No. 10963, is the initial package of the Comprehensive Tax Reform Program (CTRP) signed into law by President Rodrigo Duterte on December 19, 2017.[2]
The TRAIN Act is the first of four packages of tax reforms to the National Internal Revenue Code of 1997, or the Tax Code, as amended.[3] This package introduced changes in personal income tax (PIT),[4] estate tax, donor's tax, value added tax (VAT), documentary stamp tax (DST) and the excise tax of tobacco products, petroleum products, mineral products, automobiles, sweetened beverages, and cosmetic procedures.[5]
The prominent features of the tax reform are lower personal income tax and higher consumption tax. Individual taxpayers with taxable income not exceeding ₱250,000 annually are exempted from income tax. The exemption for minimum wage earners is retained in the revised tax system.
Tax rates for individual taxpayers still follow the progressive tax system[6] with the maximum rate of 35%, and minimum rates of 20% (taxable years 2018 to 2022) and 15% (2023 onwards). On the other hand, consumption taxes, in the form of higher excise tax on tobacco products, petroleum products, automobiles, tobacco, and additional excise tax on sweetened beverages and non-essential, invasive cosmetic procedures were introduced. It also expanded the VAT base by repealing exemption provisions in numerous special laws.
The TRAIN Act is aimed to generate revenue to achieve the 2022 and 2040 vision of the Duterte administration,[4] namely, to eradicate extreme poverty, to create inclusive institutions that will offer equal opportunities to all, and to achieve higher income country status.
It is also aimed at making the tax system simpler, fairer and more efficient.[7] Regardless, contentions about the passing of this law has been present since the beginning and the subsequent reception by the people since its ratification has been controversial. In the first quarter of 2018, both positive and negative outcomes have been observed.
The economy saw an increase in tax revenues, government expenditure and an incremental growth in GDP.[8] On the other hand, unprecedented inflation rates that exceeded projected calculations,[9] has been the cause for much uproar and objections. There have been petitions to suspend and amend the law, so as to safeguard particular sectors from soaring prices.[10][11][12]
- ^ Finance, Department of. "THE TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT. | Comprehensive Tax Reform Program • #TaxReformNow". Retrieved 2022-09-19.
- ^ https://www.dof.gov.ph/index.php/ra-10963-train-law-and-veto-message-of-the-president/
This article incorporates text from this source, which is in the public domain.
- ^ https://www.pwc.com/ph/en/tax-alerts/assets/pwcph_tax-alert-34.pdf [bare URL PDF]
- ^ a b "Comprehensive Tax Reform Program • #TaxReformNow | by making the tax system simpler, fairer, and more efficient, additional and a more sustainable stream of revenues need to be generated to make meaningful investments on our people and infrastructure to achieve our vision for the Philippines".
- ^ "TRAIN Package One: A Need-To-Know Guide to Republic Act 10963". Primer Media Inc.
- ^ "Progressive tax", Wikipedia, June 9, 2019, retrieved July 19, 2019
- ^ "About the Tax Reform – What is TRAIN? • #TaxReformNow". #TaxReformNow. Retrieved July 19, 2019.
- ^ "TRAIN law raises gov't revenue by 16.4% in Q1". Philippine News Agency.
- ^ "NEDA: June's 5.2% inflation 'unexpected'". The Philippine Star.
- ^ "Makabayan bloc asks SC to strike down tax reform law". Rappler.
- ^ Burgos, Nestor P. Jr. "3 senators call for suspension of Train law". Philippine Daily Inquirer.
- ^ Esguerra, Anthony Q. "Bam Aquino rallies support for passage of TRAIN law amendment". Philippine Daily Inquirer.
