The Implications of Train Law to the Life of Juan Dela Cruz

 The Implications of Train Law to the Life of Juan Dela Cruz

Sol Samodio


Source: Shutterstock


In 2017, the Train Law revolutionized taxation in the Philippines as it was seen to financially empower the people by reducing personal income tax. However, it was also seen in a negative light because of drastically inflating consumer prices due to the increase in custom duties on petroleum products and sweetened beverages. 



Observation

As someone who is only beginning to be enlightened to adulthood, I’ve heard about taxes all my life, but not completely sure why this is something that is integral in our lives. My first introduction to the concept of taxes was during high school, as I was a scholar in a public school. We were taught to value and get the most out of the education we were given as it was funded by our very own taxpayers. It was then I realized that the power of taxes can send people like me to school and fund projects to serve the Filipino people. A relatively recent development in our country’s tax reform is The Train Law, and through a comprehensive research, I began to understand better that these laws, although promising a good outcome, may cause our country to go further down into poverty.



Insight

The Train Law, or the Tax Reform for Acceleration and Inclusion, is a revisioning law under Republic Act No. 10963. A succeeding law after the Comprehensive Tax Reform Program (CTRP), this was signed into law by the Duterte Administration in 2017. According to the Department of Finance, the primary objective of this law is to establish a simple, just, and effective system of taxing. The financial contribution of the people is based on the individual’s capability to pay, therefore the amount of tax they pay is adjusted according to their annual income. Everyone is said to benefit from the services provided by the government through the collected contributions, especially the poor. It prides itself on reducing poverty rates from 26% (2017) to 17% by 2020, and by 2040, poverty will be significantly eradicated from our country. 


A notable feature of this law is that the personal income tax was reduced, and high-income owners have a bigger contribution to tax revenues. 70% of the contributions will be allocated to the Build, Build, Build Program, the infrastructure projects initiated by the Duterte Administration. The other 30% will be allotted for health and education programs. The primary initiatives of the health program is to increase the taxes for beverages and cigarettes to encourage a healthier lifestyle among Filipinos, as well as to lower prices for certain medications by a 12% Value-Added Tax (VAT) exemption. For the education program initiatives, the government is offering free college tuition and other miscellaneous fees to battle our educational crisis. 


However, the Train Law poses a crucial disadvantage, namely the  inflation of basic needs and goods. Through the implementation of higher taxes on cars, fuel, electricity, medicine, common goods, cosmetics. Documentary stamps, foreign currency deposits, and prime commodities, the Train Law became the reason for burden to the Filipinos. Moreover, with higher costs of fuel, transportation fares also skyrocketed and affected the livelihoods of our public utility vehicle workers. From this, there was an increase in inflation. Consequently, what seemed to be an attempt to solve our long-time issues with poverty made it worse. 



Learning

The Department of Finance responded to the plights of the masses by providing a band-aid solution of having cash transfers or supplying an allowance for those in poverty for a few years. This initiative proves to be unsustainable in the long run as the promised allowance will eventually be halted at some point. In essence, many are burdened by the high prices of goods and services, especially the poor who have low or irregular incomes. What’s more, the collected taxes for these government projects don’t seem to be put into their intended purpose– our roads and public facilities continue to be in poor condition, we are still in the midst of a worsening educational crisis, and inaccessibility to healthcare services and products persist to be the norm. It makes one question where these funds go instead of being put into good use for the masses. With the upcoming midterm elections, his situation is one of many reasons why we must exercise our democracy critically and responsibly.




SOURCES

Africa, S. 2016. TAX GANERN! DOF’s Tax Reforms Tax the Poor and Relieve the Rich. IBON Foundation. https://www.ibon.org/tax-ganern-dofs-tax-reforms-tax-the-poor-and-relieve-the-rich-2/

Department of Finance PH. 2019. Tax Reform for Acceleration and Inclusion (TRAIN)

Castillo, C., Clarete, R., Muyrong, M., & Tuaño, P. 2019. Effects of TRAIN fuel excise taxes on goods and prices. Philippine Institute for Development Studies. https://pidswebs.pids.gov.ph/CDN/PUBLICATIONS/pidspn1911.pdf

Central Station: Biyahe patungong #AmBisyon2040. YouTube. https://youtu.be/Ay1bONUB5w8?si=lH2VvafBeSJBeMnq

GMA Public Affairs. 2018. Brigada: Epekto ng TRAIN Law sa mga Pilipino, tinalakay sa 'Brigada'. YouTube. https://youtu.be/3JfVX6DMuls?si=P8LPCES5QiCvfmr4

Ms Nobody. 2018. Philippine Train Law. YouTube. https://youtu.be/3C455VwtqxA?si=RiZtTXpeqFtK7k8R

Venus, Z. 2025. Taxation in the Philippines: What to Expect in 2025. Taxumo. https://www.taxumo.com/blog/taxation2025/

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