Professional Documents
Culture Documents
UNDER THE TRAIN LAW, HOW DOES PERSONAL INCOME TAX RELATE TO THE
INCREASE OF EXCISE TAX?
Household expenses will definitely increase, take-home pay from the gain of the
exemption of Personal Income Tax (PIT) will be rendered inutile because family
income even among those earning at P22, 000/month will be insufficient for the
family’s needs. From among the informal sectors (vendors, drivers, peddlers
and other vulnerable sectors), they do not gain from the TRAIN Law specifically
from the PIT exemption because they surely have much to lose in the increase
of excise tax i.e. additional burden of more capital-build up or a decreasing take-
WHAT ARE THE EFFECTS OF FUEL PRICE INCREASE IN FILIPINO HOUSEHOLDS?
home income.
Contrary to objective of the TRAIN Law to make the tax system simpler,
fairer, and more efficient to provide the most benefits to the people, it Analyze on the following:
only:
An average family of five, needs a total of P20,000 (if living in Central Visayas) with
First
an expenditure of P19,000 per month, according to NEDA1 but this survey results
Increase the price of basic commodities while wages for workers remain
the same. is based on the inflation for the two reference years using the 2006 prices!
1
https://www.psa.gov.ph/content/average-family-income-2015-estimated-22-thousand-pesos-
monthly-results-2015-family-income
Even the government under earners, informal workers and the
the AmBisyon Natin 2040 bottom 5 of the Income Decile3 do
recognizes that a Filipino not benefit from the TRAIN Law.
household of 4 should have a
gross monthly income of
P120,000 to live a "simple,
comfortable life," which
WHAT ARE THE IMPACT OF FUEL
entails owning a car and a
PRICES ON THE TRANSPORT
medium-sized house, traveling
SECTOR?
occasionally, as well as
sending 2 children to college, a Jeeps typically consume 25
survey conducted by liters of diesel/day. At P30.30/L (Dec. 2016 prices), a PUJ driver spends
the National Economic and P758/day on fuel. The proposed 3-peso excise tax will mean 11.1%
Diagram 2: (Rappler) visualization of NEDA's estimate of Total
Development Authority Family's Income in 2018 increase in their fuel expenses or an additional 84 pesos! Likewise true to
(NEDA) showed in June 20182. Bus drivers.
Taxis run on gasoline. The proposed 2.7-peso excise tax on the 45.98/L
Under the TRAIN Law, the government reports above-mentioned will just be an
(Dec. 2016) will mean 6.6% increase in their fuel expenses. This is also
illusive hope for most Filipinos from among the middle class and very
true to tricycle drivers.
unfortunate for the rest of the lower classes most especially among the poor
and marginalized. WHAT IS THE EFFECT OF TRAIN ON ELECTRICITY EXPENSES4?
• Based on these estimates, paying an extra 14 centavos/kWh this year, 21
DID ALL INCOME-EARNERS BENEFIT FROM THE TRAIN LAW, OR LEFT SOME
centavos/kWh in 2019, and 27 centavos/kWh in 2020 might appear small
PEOPLE EVEN FAR BEHIND?
for those consuming only 200 kWh/month.
Those who benefit from the TRAIN Law particularly from the Personal Income
• This consumption level implies that a household doesn’t have any air-con
Tax exemption are among the Middle-income earners, professionals and top
but maintains a small refrigerator and a few electric lights may have to
executives. Those from the rest of the population who are Minimum-wage-
pay an extra P28/month, P42/month and P54/month in 2018, 2019, and
2020, respectively.
2
https://www.rappler.com/business/economy-watch/137891-ideal-monthly-income-neda-2040-
4
vision Bienvenido S. Oplas, Jr. is President of Minimal Government Thinkers, a member-institute of
3
*POOREST DECILE:D1 – Subsistence Poor, D2 – Subsistence Poor, D3 – Poor, D4 – Near Poor, D5 – Economic Freedom Network (EFN) Asia:
Near Poor
• But that is only for direct household electricity consumption. Filipinos express resentment to the increasing prices of commodities in the
market.
• People who live in those small houses may work and/or purchase services
in factories, schools, and universities, shops and malls, hotels and
restaurants, hospitals and airports, etc. To allow the TRAIN Law to persist is to mislead the countries development and
giving the heaviest burden to the poor families. Indeed, contrary to the
• These enterprises consume tens of thousands of kWh per month and the President’s promise of “malasakit at tunay na pagbabago” for Filipinos.
additional electricity cost will be passed on to the consumers, which
might affect sales and hence, affect future salaries and benefits of We are losing sight of the genuine change.
workers.
WHAT IS OUR MOVE ON THE TRAIN LAW?
WHERE WILL THE REVENUE FROM TRAIN LAW GO?
Not more than 70% is earmarked for infrastructure projects such as, but not limited to, We move for a genuine progressive
the Build, Build, Build program. Not more than 30% will be used to fund social taxation. The TRAIN LAW is a
mitigating measures like the additional P200 unconditional cash transfer for the regressive taxation. For a progressive
poorest 10 million households, and other social welfare benefits and programs. taxation, the rich should be taxed
more than the poor but the TRAIN law
are cutting taxes on the rich and
WHY MUST THE TRAIN LAW BE A MATTER OF CONCERN FOR EVERYONE? adding up more burden of taxation on
the poor. The poor bear the greater
In the pursuit of Duterte burden under the TRAIN LAW. The
administration’s ambitious
"build, build, build" 40% Highest income Filipinos with a
infrastructure program, combined income of P4.1Trillion only bears
through the TRAIN Law it is 48 billion as net tax burden, only 0.8% of its
expected to raise government combined income of P4.1T while the 60%
revenue of P366 billion every poorest Filipinos with a combined income
year. This first package of the of P2.1T has a net tax burden of 47 billion
comprehensive tax reform pesos, 2.3% of its combined income.
program (CTRP) aims to fund
the Administration’s 10-point
Socioeconomic Agenda which supposedly will ensure Filipinos to have an
improved and adequate public services. However, in the present situation, many
References:
https://www.psa.gov.ph/content/average-family-income-2015-estimated-22-thousand-pesos-
monthly-results-2015-family-income
https://www.rappler.com/business/economy-watch/137891-ideal-monthly-income-neda-2040-
vision
http://primer.com.ph/tips-guides/2018/01/04/train-package-one-a-need-to-know-guide-to-
republic-act-10963/