Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
1 Below P250,000 0%
1 Below P250,000 0%
These other sources include diesel, oil, and other petroleum products
which will be slapped a so-called “highly progressive tax” which
supposedly shifts the tax to higher-income segments of the population.
According to the DOF, the justification is that the top 10%, or around two
million households, consume more than half of the fuel in the
Philippines. The same study said that the top 1% of Filipino families
consume 13% of fuel.
Diesel None P3.00 per liter P5.00 per liter P6.00 per liter
LPG, Kerosene, bunker oil P3.50 to P5.35 per Additional P3.00 per Additional P5.00 per Additional P6.00
liter or kg liter or kg liter or kg liter or kg
Gasoline, lubricating oils, P3.50 to P5.35 Additional P8.00 per Additional P9.00 per Additional P10.0
and greases liter or kg liter or kg liter or kg
At present, the following entities are exempted from paying VAT but
will start to pay the tax once the bill is approved:
Below P600,000 3% 4%
P600,000 to P1.1 million P18,000 + 30% in excess of P600,000 P24,000 + 40% in excess of P600,0
P1.1 million to P2.1 million P168,000 + 50% in excess of P1.1 Million P224,000 + 60% in excess of P1.1 M
P2.1 million to P3.1 million P668,000 + 80% in excess of P2.1 Million P824,000 + 100% in excess of P2.1
Above P3.1 million P1.468 million + 90% in excess of P3.1 P1.824 million + 120% in excess of
Million Million
Starting in the first payday of 2018, some six million Filipino workers should see an income tax reduction in
their payslip, thanks to the newly implemented Tax Reform for Acceleration and Inclusion (TRAIN) Act.
The TRAIN law or Republic Act 10963, which took effect on January 1, 2018, is the first of five tax reform
packages for a simpler, fair, and efficient tax system.
Essentially, TRAIN lowers personal income tax, simplifies the estate and donor’s tax, and expands the value-
added tax (VAT) range. On the other hand, it increases excise taxes on fuel, mineral products, vehicles, and
cigarettes. It also imposes new taxes on sugar-sweetened beverages and cosmetic procedures.
Revenues collected from TRAIN will fund the government’s infrastructure and socio-economic programs.
What does this mean to an ordinary employee like you? Is it good or bad news? According to the government,
the benefits of tax reform will outweigh the effect of price hikes resulting from the higher excise taxes.
That remains to be seen. For now, be hopeful and look at the good effects of this new law on your personal
finance.
Since the time you received your first-ever salary, you’ve been dreading to check your payslips. It really hurts
to see huge taxes being deducted from your hard-earned money.
Now, you can heave a sigh of relief because if your gross monthly salary is PHP 21,000 or less, you will no
longer be taxed.
Under the TRAIN law, those with an annual taxable income of PHP 250,000 are exempted from income tax
payment. Around 83% of taxpayers in the Philippines will benefit from the tax exemption, as reported by the
Department of Finance (DOF).
The income tax rate for Pinoys earning above PHP 250,000 per year will be 20% to 35% from 2018 to 2022
and 15% to 35% from 2023 and beyond.
Before the tax reform implementation, those with over PHP 250,000 to PHP 500,000 annual income had to pay
30% tax. Those earning over PHP 500,000 had a tax rate of 32%.
A lower income tax means higher take-home pay for 99% of Pinoy taxpayers. This also means additional
disposable income that you can use to manage your finances better, like investing your money, buying a life
insurance, and paying off your credit card debt.
To check how the new tax reform program will affect your income, you can use the DOF tax calculator. This
online tool also computes the impact of excise taxes and VAT on your income.
2. Fair Tax System
Above-minimum wage and middle-income earners (who had a high tax rate of 32%) will benefit the most from
the TRAIN law, said tax expert Raymond Abrea in a GMA News online report.
According to the DOF, the new law will lessen the tax burden of the poor and the middle class, passing it on to
the higher-income earners who comprise 0.1% of taxpayers in the Philippines. Those earning more than PHP 8
million annually will pay a higher maximum tax rate of 35% (previously at 32%).
Prior to TRAIN implementation, economists criticized the 20-year-old Philippine tax system under the
National Internal Revenue Code of 1997 for being unfair to the Filipino middle class. The Philippines had
the second highest income tax rates in Southeast Asia and seventh in Asia, according to the Joint Foreign
Chambers of the Philippines.
For all other tax types, tax compliance is now simpler and easier. Here are the notable changes to the tax filing
and payment process under the TRAIN law:
Optional flat 8% tax rate on gross sales or receipts not more than PHP 3 million (for self-employed
professionals and small businesses) that can be filed and paid annually or quarterly instead of monthly
or bi-monthly payments of business and income taxes
Filing of tax return for final withholding tax to be done quarterly rather than monthly
Filing of VAT Return and tax payment to be done quarterly rather than monthly from 2023 onwards
The new law also expands VAT exemption for certain people and products, including the following:
Senior citizens
Persons with disability
Raw food/agricultural products
Tourism businesses
Medicines for diabetes, high cholesterol, and hypertension (from 2019 onwards)
Health and education
Renewable energy (zero-rating)
Homeowner fees (e.g., association dues, membership fees, etc.)
BPO companies within special economic zones
Final Thoughts
The tax reform law may not be perfect, but it does provide a lot of benefits to the low and middle-income
classes. More money in your pocket, though, doesn’t mean you should upgrade your lifestyle, too.
Be wise in managing your finances—remember that prices of some goods will go up as a result of increased
excise taxes. Save and invest your extra take-home pay, and spend less on the non-essentials. Time to quit
smoking and drinking soda, perhaps?
4
SHARES
4
Via Philippine Canadian Inquirer
President Duterte on December 19, 2017 signed into law the Tax Reformation for
Acceleration and Inclusion (Train) bill, the first tax reform package, for a fairer and
simpler tax system for the Filipinos, allowing it to take effect starting January 1, 2018.
While we celebrated the new year and were excited to start with a clean slate, we were
taking the TRAIN law with us.
But what exactly does the TRAIN law entail? Clue: it’s not just tax exemption for wage-
earners.
Tax exemption includes the mandated 13th month bonus and other bonuses. This
means every employee can now take home more than they did the previous years. But
since everything is a give-and-take process, some goods will be priced higher from now
on.
Exempted from this are milk products, 100% natural fruit and vegetable juices, and
ground, instant, and pre-packaged coffee products.
We felt the blow when S&R announced they are discontinuing their unlimited soda
promo. Which other fast foods will follow suit?
Via Facebook: CNN Philippines
A pack of cigarettes that costs P30 will now cost P32.50 this year and will increase in
P2.5 increments until 2022. So if you buy a pack of cigarettes in 2022, it will damage
your wallet to the tune of P40 and it might possibly change your life. A 4% increase in
taxes will be implemented starting 2023.
rosemarie@lalolalota
D lang ako naiyak... napahagulgol pa
Hybrid cars are taxed half and electric vehicles and pick-ups are exempt from the rates.
Taxes will increase by more than 10-20% in 2019.
In the previous law, donor’s tax goes up to 15% if the donor and the donee are related
and 30% if they’re not. The donor’s tax is now at 6% regardless of the relationship
between donor and donee.
Under the TRAIN law however, almost all Documentary Stamp Taxes have doubled.
While the first proposal was for a 20% tax increase in some cosmetic procedures that
are for aesthetic purposes only, it was finalized to 5%. Exempted from this tax are
surgeries and procedures for correcting dysfunctional body areas and birth defects.
This means more Filipinos can have a chance at being entrepreneurs which in turn, if
the business thrives, makes way for more infrastructures and jobs.
If you’re wondering where the revenue from the TRAIN law will go, 70% of it is going to
the Build, Build, Build Program of the government that aims to spend more for
infrastructures until the end of the president’s term in 2022. The other 30% will go to
education, social protection, health, and housing among others.
We’re in for one heck of a ride financially; taxes will become even higher as the years
go by. You can look at this as something that will make you want to move abroad and
switch nationalities, or you can always look at the bright side: you can choose what you
want to spend your increased take-home money for and you can wait for a full year to
see the TRAIN law’s full impact.