July 29, 2018 [TRAIN LAW]

Most Filipino netizens view the passage and implementation of the Tax Reform for Acceleration
and Inclusion (TRAIN) law in negative light, a recent study by Research and Tech Lab (RTL)
showed.

The study conducted from January to February this year, digital research firm RTL found that
out of 861 recorded sentiments online regarding the TRAIN Law, 94.08 percent of the
engagements considered not helpful at all for the country.

“The top three social media sentiments read by the research analytics group say that the TRAIN
law is more of a burden to the Filipinos, it is anti-poor, and most netizens are generally
dismayed by the overall impact of the said law,” it said.

The TRAIN was signed into law by President Rodrigo Duterte on December 19, 2017,
effectively lowering the personal income tax rates and expanding the value-added tax (VAT)
base starting January 2018.

As a result of higher excise tax rates, prices of liquefied petroleum gas (LPG) will go up P1 per
liter, diesel by P2.50 per liter, and gasoline by P2.65 per liter.
(Source: http://www.gmanetwork.com/news/money/economy/647483/most-filipino-netizens-view-train-law-negatively-study/story/)

The TRAIN law exempts those who earn less than P250,000 annually from income tax, which
spells a bigger take home pay for minimum wage earners. According to the Department of
Finance, the law is expected to help 99% of Filipino families because of the exception to
personal income tax.

This is coupled with an increase in excise tax, or taxes on products that use sugar, salt, oil, and
coal. This paves the way for even the most basic commodities to inflate. The cost of
transportation is also expected to increase given the oil price hikes that will follow the passing of
the TRAIN law.

“Most of the country’s total 22.7 million families do not pay income tax because they are just
minimum wage earners or otherwise in informal work with low and erratic incomes,” said Sonny
Africa, head of IBON Foundation.

Irene Hilario added that the ‘anti-poor’ projects and programs of the Duterte administration are
in no way for the development of the country, but instead a profiteering scheme of foreign
companies.

The money will go into foreign debt servicing and into Duterte’s Build, Build, Build program,
which is expected to see a rise in infrastructures such as malls and, but not of basic social
services such as affordable medical facilities or housing.

Part of the money collected from excise tax will also go to Duterte’s Martial Law and Oplan
Tokhang, which continue to claim lives in the streets and to deal human rights violations against
the Filipino people, according to Kate Raca of Alay Sining.

(Source: http://tinigngplaridel.net/news/2018/up-diliman-students-slam-anti-poor-train-law/)

1 ANTI-TRAIN LAW| GROUP 3

 July 29, 2018 [TRAIN LAW]

Tax Reform for Acceleration and Inclusion (TRAIN) Act.

Republic Act No. 10963
Key Points:

 The increase in take-home pay is actually useless because of the increased price of
some necessities.
 TRAIN law is a ‘No’ for most of the public because they claim that it is only beneficial to
government officials while it is unfair to minimum wage earners
 Moreover, not everyone who earn below Php 250, 000 will feel the impact of the income
tax exemption, as many of those workers earn minimum wage and do not pay taxes.
 “Even if TRAIN reduces income taxes paid by most of the reported 7.5 million personal
income taxpayers, this still leaves as much as 15.2 million families without any income
tax gains,” according to Sonny Africa (head of IBON Foundation)
 the collected taxes from the increase in excise tax will not reach the Filipino people in
the way that they should.
 If the TRAIN Law was for the poor, it should explain why inflation in the first quarter
alone was already 4.7 percent. (http://davaotoday.com/main/politics/anti-train-petitioners-say-
law-is-misleading-deceptive/
 The economic suffering being endured by our countrymen because of the TRAIN law is
very real and should be addressed the soonest time possible
 The poor don’t pay tax in the first place, so the benefits will not be given to them. At the
same time, as the consumer prices of goods upsurge, they will surely be burdened.
 We don't think TRAIN will provide significant impact to an average wage earner. You
have higher pay, but electricity, transport, grocery bills will also be higher. It is like the
government is just giving us a new perspective to look at our taxes.
 The reduction in income tax is rendered meaningless by the tremendous increase in the
taxes to be imposed on consumer goods, prime commodities, medicines, electricity, and
fuel. In particular, the prices of gasoline and fuel products are expected to increase by
three to four pesos per liter.

2 ANTI-TRAIN LAW| GROUP 3

 July 29, 2018 [TRAIN LAW]

Bayan Muna Representative Carlos Zarate led the filing of House Bill 7653 to counter the “anti-
poor and anti-people” facets of the Tax Reform for Acceleration and Inclusion (TRAIN) law.

“House Bill 7653 will repeal the anti-poor and anti-people provisions of the TRAIN law to lessen
the burden on consumers, because they are the ones bearing the brunt of the TRAIN law,”
Zarate said in a statement.

“They don’t even feel the supposed 6.8% growth of the Philippine economy,” he added.

Zarate said that the HB 7653 has provisions that will bring back the prices of oil products and
remove the added excise tax on sugar-sweetened beverages. He added that the bill will also
restore the Value Added Tax (VAT) exemption of electricity sales and low-cost housing, among
others.

“This bill should not be seen as a hindrance by the administration and taken as a means to
assuage the suffering of our poor countrymen,” Zarate said.

(Source: http://newsinfo.inquirer.net/989138/makabayan-bloc-files-bill-to-counter-train-law)

The newly-signed Tax Reform Acceleration and Inclusion (TRAIN) law will burden about 21
million poor Filipinos, the National Anti-Poverty Commission (NAPC) Chief Liza Maza

The law, which took effect this year, exempts workers earning P250, 000 annually and below
from paying the personal income tax. Under the law, benefits such as 13th-month pay and
bonuses amounting to P90, 000 are also exempted from taxation.
However, the measure also imposes new taxes on diesel, liquefied petroleum gas, kerosene,
and bunker fuel for electricity generation, and higher taxes on other oil products
(Source: http://www.canadianinquirer.net/2018/01/12/train-law-will-harm-21m-poor-filipinos-says-anti-
poverty-chief/)

Situational (source: https://www.rappler.com/newsbreak/iq/193170-train-tax-reform-law-effects-

filipino-consumers-workers)

A small-time vendor in the Philippines, like 48-year-old Meanne Reyes, who has two kids.
Reyes, who sells sugar-sweetened drinks, snacks, and tobacco along Amang Rodriguez
Avenue in Pasig City, said she has fewer stocks due to TRAIN.

“Marlboro used to be P5 per stick. Now I'm selling it for P7 each. Since an entire pack is now
more expensive, I was forced to buy fewer supplies. The price hike is significant. What will
happen to people like me who have no fixed income and depend on sidewalk vending to earn a
living?”

Royd Agapito (not his real name), a 25-year-old market analyst for a research firm, got what he
wanted: higher take-home pay. But what he did not expect is a higher monthly household bill
that would offset the gains he would receive from the newly-implemented Tax Reform for
Acceleration and Inclusion (TRAIN) law.

3 ANTI-TRAIN LAW| GROUP 3

 July 29, 2018 [TRAIN LAW]

Each household would get P2,400 per year in 2018, as well as P3,600 per year in 2019 and
2020. "DSWD will identify beneficiaries based on the [list] – the Pantawid Pamilyang Pilipino
Program and the social pension beneficiaries. The budget for the unconditional cash transfer is
included in the 2018 budget, totaling P25.7 billion," the finance chief said in a Malacañang
briefing.

Rice, which is supposed to be value-added tax-exempt, became more expensive by at least P2

per kilo, while prices of meat products like beef, chicken and pork rose by P10 to P20 per kilo.

“We need not wait anymore for even more adverse effects, more price shocks, affecting
especially the poor, before Congress should decisively act. Hundreds of workers of Coca-Cola
were laid off, prices of petroleum products have been going up,” Zarate said.

He said based on official government data, inflation or the increase in consumer prices went up
to 4.7 percent last month from 4.3 percent in March and 3.8 percent in February.

(Source: https://www.philstar.com/headlines/2018/05/16/1815688/train-law-may-be-reviewed-due-rising-
prices)

The critics maintain that it is easy for politicians to defend the TRAIN Act because politicians
wallow in power, wealth, and privilege. More specifically, politicians have generous expense
accounts by which practically everything they purchase, such as groceries, airline tickets, and
automobile fuel, are paid for by the taxpaying public. In other words, it’s easy for members of
Congress to impose higher taxes on basic commodities since they are hardly affected by such
tax hikes.

It is also pointed out that the TRAIN Act comes at a bad time because many government
officials have been wasting public funds. Millions of pesos worth of dengue vaccines bought by
the Department of Health from abroad have turned out to be unsafe. Those vaccines are
expiring soon, and there is no assurance that a refund will be forthcoming.

The chiefs of the Maritime Industry Authority, the Dangerous Drugs Board, and the Presidential
Commission for the Urban Poor went on several unnecessary overseas trips at the expense of
the taxpayers. They were all fired by President Duterte. Many judicial officials go on overseas
trips which are either useless or unnecessary.

Thus, if those needless expenditures of public funds did not take place, the TRAIN Act may not
be necessary to enact at all. At the end of the day, the fact that remains is that questioning the
constitutionality of a tax legislation is always an uphill legal battle. That’s because the power of
the state to impose taxes is one of its inherent powers. Thus, the TRAIN Act is presumed valid
and its oppositors must prove otherwise in the Supreme Court.
(Souce: http://www.manilastandard.net/opinion/columns/hail-to-the-chair-by-victor-avecilla/256378/pros-
and-cons-of-train.html)

4 ANTI-TRAIN LAW| GROUP 3