Ranie B.

Monteclaro

TAX 311 – Income Taxation

Case Study No.1

PHILIPPINE TAXATION SYSTEM: Better or Worse?

Not only do our taxes disproportionately burden the poor

and benefit the rich, but they also yield too little revenue
given the distortions they create. Needless to say, both
problems need to be resolved soon. The changes in our taxation
system have contributed a big impact to every citizen in our
country. I can say that every decision has two possible outcomes
it’s either positive or negative or maybe both.

Implementing the Tax Reform for Acceleration and Inclusion

(TRAIN) Law benefits the others while it is a burden for others.
The existing tax structure, where different tax rates are
imposed on different income levels and on different industries,
could be one of the reasons hampering the full potentials of
revenue collection by the government. Try to think of it, if the
government impose a fix tax rate to all different income level
and on different industries. The government can maximize the
collection of tax payments and can save a big funds for public
purposes, but here comes the entities and individuals that has
low income, it is very hard for them to pay tax knowing the fact
that their earnings are just sufficient to their needs. Another
aspect of taxation that has a big impact to our society is the
higher sin taxes. This increase in tax pushes the supplier,
manufacturers, retailer to also increase their prices that later
on leads to decreasing number of demand because of
affordability. The purpose of this action is to control and
regulate the consumer on using sin products especially in
cigarettes. The government wants only to protect our welfare
because it is in the sayings that “Health is Wealth”. Next is in
donors tax, we all know that donors tax deals with donation and
donation is a gratuitous action done by the donor. Lessening the
tax rate in donors tax helps a lot the donee of the said
donation. It is so inappropriate for the government to impose a
high tax rate in which the transaction is beneficial to the
welfare of its citizen. However, sometimes it is being used to
unlawful transactions in order to avoid having big amount of tax
payable.

Based on what I have observed, I can say that the

Philippine tax system is improving and really helps our economy
to perform very well. I know it is not perfect but we can see
that the government slowly bringing us wealth. The government
was able to save enough funds to sustain the needs and to
improve the community. Especially in this time of pandemic, the
government really needs a fund to buy all the necessary medical
supplies to serve our country. The government wisely uses its
taxation power to improve the country at the same time protect
its citizen. When we talk about the concept, principles, and
theories of taxation that can be violated by this changes, I
think the government doesn’t violate any of this matters.
Everything is in accordance with the concept, principles, and
theories about taxation. If the government continues to improve
their taxation system our country can sustain every needs of the
citizen in full capacity.