THE TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT.

Date Posted : December 27, 2017

THE TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT.

Date Posted : December 27, 2017

President Rodrigo Roa Duterte signed into law Republic Act No. 10963, otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) Act, the first package of the Comprehensive Tax Reform Program (CTRP, on December 19, 2017, in Malacanang.

The TRAIN will provide hefty income tax cuts for the 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.

This tax reform package corrects a 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. This is the biggest Christmas and New Year gift the government is giving to the people.

For the poorest 10 million households, the government is giving them targeted cash transfers of PHP 200 per month in 2018 and P300 per month in 2019 and 2020, sourced from higher consumption taxes that the rich will contribute, as well as better social services, healthcare, and education. All these will prepare the people for better job opportunities.

In a separate message, President Duterte has vetoed certain provisions of the TRAIN. The vetoed five line items are the following provisions:

1. Reduced income tax rate of employees of Regional Headquarters (RHQs), Regional Operating Headquarters (ROHQs), Offshore Banking Units (OBUs), and Petroleum Service Contractors and Subcontractors;

2. Zero-rating of sales of goods and services to separate customs territory and tourism enterprise zones;

3. Exemption from percentage tax of gross sales/receipts not exceeding five hundred thousand pesos (P500,000.00);

4. Exemption of various petroleum products from excise tax, when used as input, feedstock, or as a raw material in the manufacturing of petrochemical products, or in the refining of petroleum products, or as a replacement fuel for natural gas, fired combined cycle power plants; and

5. Earmarking of incremental tobacco taxes.

The TRAIN raises significant revenues to support the President’s priority social and infrastructure programs, which will help realize his administration’s goal of reducing the poverty rate from 21.6 to 14 percent by 2022. Some 70 percent of the incremental revenues will help fund the government’s infrastructure modernization program, while the balance will go to social services.

Starting in 2018, the government expects to raise funds equivalent to about two-thirds of the incremental revenues targeted under this tax reform law. Congress has committed to passing the rest of the TRAIN’s provisions representing the remaining one-third of the targeted revenues in early 2018 to help us achieve our revenue and deficit targets.

With the people’s support and understanding, all these reforms will result in more and better jobs, lower prices, and a brighter future for every Filipino.


-oOo-

Date Posted December 27, 2017

More on TaxReform News

Dominguez seeks congressional OK of 2nd tax reform package →

Date Posted: May 22, 2018

Finance Secretary Carlos Dominguez III has called on lawmakers to proceed with approving the Duterte … Continue reading Dominguez seeks congressional OK of 2nd tax reform package

VAT exemptions for cooperatives unfair to 100 million taxpayers →

Date Posted: May 25, 2017

Retaining the value-added tax exemptions for all cooperatives that already enjoy almost all types of … Continue reading VAT exemptions for cooperatives unfair to 100 million taxpayers

CTRP to ensure vibrant future for next generations of Filipinos →

Date Posted: April 3, 2017

The main authors of the Comprehensive Tax Reform Program (CTRP) in the Congress said their … Continue reading CTRP to ensure vibrant future for next generations of Filipinos

WE RECOMMEND

Over 1,000 entrepreneurs take part in ‘Sulong’ regional forums

Date Posted: April 29, 2019

More than 1,000 entrepreneurs, mostly representing small and medium enterprises (SMEs), were consulted by the … Continue reading Over 1,000 entrepreneurs take part in ‘Sulong’ regional forums

Join our mailing list for news and information about tax reform #TaxReformNow
The Department of Finance (DOF) is the government’s steward of sound fiscal policy. It formulates revenue policies that will ensure funding of critical government programs that promote welfare among our people and accelerate economic growth and stability. Read More..

Department of Finance | TaxReform

BSP Complex, Roxas Blvd., 1004 Metro Manila, Philippines
(+632) 8525.0244
Scroll Up