BACKGROUND INFORMATION:

Source: https://www.gmanetwork.com/news/opinion/content/620909/3-key-reasons-why-the-
train-tax-reform-bill-is-important/story/
According to what is stated in GMANEWSONLINE by Richard Javad Heydarian published
(August 7, 2017), the government seems to have recognized this fundamental reality, thus the
launching of the “Dutertenomics” agenda in April. The so-called “build, build, build” agenda of
the president is ambitious, yet highly necessary. It reflects a commendable re-focus on the
administration’s part. More recently, another major government initiative has been put on the
table: The Tax Reform of Acceleration and Inclusion (TRAIN). Considering how its interrelated
with the “build, build, build” agenda. No less than President Rodrigo Duterte certified bill as
“urgent” and even half-jokingly taunted the Senate to get it through during his State of the
Nation Address (SONA) last July 25,2017.
The TRAIN law is important because the people have an outdated and arguably regressive tax
system. Which undermines both our egalitarian values as well as economic vitality. The
government under tax system, simply can’t raise enough funds to deliver basic services
commensurable to the needs of our booming economy and population.
THESIS STATEMENT:
Source: http://www.dof.gov.ph/taxreform/wp-content/uploads/2017/02/Tax-policy-revised-
package-1-HB4774-briefing.pdf
http://www.philstar.com/headlines/2018/01/03/1774263/how-government-plans-help-poor-
filipinos-affected-train
Even though the TAIN law is problematic crisis for poor people, its favorable not only to the
country also to them because in the long run the poverty line will be decreased, we can invest
more in service and facilities and in all aspects and its needed to fund the ten-point socio
economic agenda.
Arguements:
With the Tax reform on acceleration and inclusion taking place in the Philippines, people can if
not, will see that the poverty rate of our country should be able to decrease according to the
department of finance (2017); why is this, well first and foremost, “education for the youth is the
foundation for the next generation.” Now what does this relate to in this paper? With the help of
the TRAIN law in the long-term, all these investments require additional funds of around 1
trillion pesos per year in 2016 prices on top of the current 1.7 trillion pesos (department of
finance, 2017 now part of this revenue goes to creating a more conducive learning environment
with the ideal teacher-to-student ratio, which is 30:1(student-teacher ratio, 2014), but going back
to the topic, with the increase of facilities and services for education,)

2nd argument
The second evidence to prove that the TRAIN law is indeed a positive and beneficial for the
country is that most of the tax revenue would be invested in better services and facilities in all
aspects. The additional revenue raised by the tax reform will be used to fund the infrastructure
program of the Department of Public Works and Highways (DPWH) which consists of major
highways, expressways, and flood control projects. (Department of Finance, 2017). Another
investment would be that for education, the tax reform proposal will be able to fund investments
in education, achieving a more conducive learning environment with the ideal teacher-to-student
ratio and classroom-to-student ratio. (Department of Finance, 2017). With tax reform, we can
invest more in our country’s healthcare by providing better services and facilities. The
government can upgrade 703 local hospitals, establish 25 local hospitals; upgrade 263, build
18,412 new barangay and rural health centers etc etc. the tax reform program aims to provide the
needed additional revenues that would fund our country’s investment needs, promoting better
lives for Filipinos, for infrastructure, the following imporovements were mention above or
before. (Department of Finance, 2017)

The third and last evidence is that the recent tax reform is needed to fund the ten-point socio-
economic agenda. (Department of Finance, 2017). What is the ten-point socio-economic agenda?
1st, continue and maintain current and macroeconomic policies, including fiscal, monetary and
trade policies. 2nd institute progressive tax reform and more effective tax collection, indexing
taxes to inflation, 3rd increase competitiveness and the ease of doing business. (to be continued)

COUNTERCLAIM:
Source: http://peped.org/economicinvestigations/evaluate-economic-effects-rise-commodity-
prices-global-economy-whats-answer/
http://www.gmanetwork.com/news/money/economy/638579/dti-effect-of-train-on-prices-of-
prime-commodities-minimal/story/
http://business.inquirer.net/243395/dof-warns-fuel-price-hike-jan-1-can-considered-profiteering-
business-dof-fuel-prices-excise-tax-importation
http://www.dof.gov.ph/taxreform/index.php/e-vat/
Effects of the price hike in commodities
According to (http://peped.org) Increased costs might be offset by increased productivity or
efficiency gains. Rising commodity prices might lead to lower growth – this can be explained
using AD/AS analysis. However, if the rise in commodity prices is caused by rapid world
growth, then the impact on growth might be limited. There is the possibility of increased
unemployment. This possibility may be reduced if increased global demand is the cause of
higher commodity prices.
Rising commodity prices could have an impact on the trade in goods balance. There may be
differential effects depending on whether the country is a net importer or exporter of
commodities. A rise in commodity prices may have an impact on income distribution. An
increase in commodity prices may have an impact on real incomes and consumption.
According to Ted Cordero (January 4,2018) the department of Trade and Industry(DTI) on
January 4,2018 allayed fears that higher excise tax on fuel products due to the Tax Reform and
Inclusion (TRAIN) law would increase the prices of prime commodities. Based on DTI’s
estimates, Lopez said, the effect of the higher excise tax rates on petroleum products to the total
production costs of manufactures is only 0.4 percent.
The revenue/tax would be a profiteering
According to Ben O. de Vera (January 01, 2018) oil (price) increase done by companies on
January 1 might be considered profiteering. President Rodrigo Duterte last December 19 signed
into law package 1A of the Tax Reform for Acceleration and Inclusion Act (TRAIN) under
republic act (RA) No. 10963, which starting January 1 this year will slash and restructure
personal income tax rates that stayed the same for two decades, while also jackip up or slapping
new taxes on consumption of oil, cigarettes, sugary drinks and vehicles.
Rebuttal:
Sources: https://mommyginger.com/category/business
http://www.dof.gov.ph/taxreform/index.php/e-vat/
Basic necessities are Value Added Tax(VAT) Exempted
The Philippines has one of the highest VAT rates but also the highest number of
exemptions in the Southeast Asia region. Consequently, the Philippines collect the same
amount of VAT revenues as a percentage of the economy as that of Thailand despite only
imposing a 7% VAT rate, while the Philippines is at 12%.
These tax exemptions have been given to many sectors and were supposedly very well meaning.
However, these exemptions have also created much confusion, complexity, and discretion in our
tax system resulting in leakages and opening doors for negotiation, corruption, and tax evasion.
The truth is, these exemptions are not free and someone pays for them, and it is most often the
poor who pays as they are deprived of quality public service necessary to accelerate their
graduation out of poverty.
30% of the revenue close to the military infrastructure sports facilities and etc. 70% will go
onto the “Build, Build, Build” program
President Rodrigo Duterte signed the Tax Reform for Acceleration and Inclusion (TRAIN) into
law last December 19, 2017. It’s the first package among the other tax reform measures to be
issued by his administration. It expected to make a considerable impact on the prices of goods
and services, take-home pay of Filipinos and their purchasing power.
About 70% of collected revenues will go to infrastructure projects that the Duterte’s
administration plan to build. His administration has planned to allocate P8.44 trillion for its
“Build, Build, Build” program for 2017-2022. They plan to build more road networks and better
mass transportation rides for the public. These will enhance the economy and create more
investment opportunities, thereby creating more jobs or income sources for the Filipinos.
The other projects under the 70% collected revenues are the following: infrastructure for the
military, drinking water facilities in all public places and sports facilities for public schools. The
remaining 30% will be spent on social mitigating measures and investments for health, nutrition,
hunger and education.