At the start of January 2018, the TRAIN Law, or commonly known as Tax Reform for Acceleration and Inclusion immediately took effect. For some Filipinos, this law is a blessing as take-home pays and company bonuses increased depending on salary tax bracket. Personally, I can attest to this. I am earning less than 250,000 pesos a year (Yep, Civil Engineers aren’t paid that much), hence I am exempted to pay for personal income tax. I must admit, it really helped me a lot. That wage portion became an addition to my monthly savings.
Though this law is beneficial for some, not every Filipino is pleased to have this implemented, especially those who are earning a minimum wage, self-employed individuals, and small unregistered enterprises. As a whole, these folks are considered as informal economy since they are neither taxed nor monitored in the country’s overall economy census. Part of this sector includes small vendors, farmers, fishermen, PUJ and pedicab drivers, and contractual construction workers. Among others, these earners are having a hard time coping with the rising inflation of goods brought by the said law, and here are the main reasons why:
Excise tax on sweetened beverages. Aren’t you blown away by the recent soda prices? I remember buying a liter of soda last month which costs 35 pesos! It was only 23 pesos last year! What happened? Well, these sugared drinks are now taxed at 6-7 Pesos per liter depending on their sugar content. My family isn’t a great fan of soda and other sweetened beverages. We’re coffee addicts. Thankfully, milk, pre-packed coffee, and natural fruit and vegetable juices are exempted. However, most Filipinos couldn’t swallow their lunches well without having a sip of sodas. If they can’t afford it anymore, then there’s water with little to no cost at all. It’s a healthier counterpart after all.
Added tax in cigarettes too? I won’t complain! Cigarettes, from its base price, 30 pesos, rose to 32.5 pesos recently and this will continue to rise with an increment of 2.5 pesos per year until 2022. Aside from being a non-smoker and a smoke hater, my father is a cigarette smoker which I strongly condemn. I noticed how his cigarette consumption lessened during the implementation of SINtax years ago. I hope this time it will completely eliminate his addiction to cigarettes and I hope it will do the same with our fellow Filipinos.
More taxes for car owners. If you’re planning to buy a car, brace yourself for the doubled excise tax from 2% to 4% for cars having a cost of P600,000 and below. If you’re eyeing on a car having a worth over P4 Million, then be prepared for a tax up to 50% of the vehicle’s value from its previous 10%. Commuters can also experience adverse effects on transportation expenses due to a tax increase on petroleum products up to P8 per liter. Diesel, LPG, and Kerosene are also subjected to additional tax ranging from P1 to P3 per liter.
The above points are just a few of the counter effects of TRAIN Law. If we look deeper, the added taxes on merchandises such as sweet beverages and cigarettes may result on healthier lives for more Filipinos for they will be forced to trim down their consumption of these products which could be detrimental to health. However, additional taxes for cars and fuels could be burdensome for the Filipinos, both the car owners and commuters.
Along with the price hikes of the above-mentioned commodities, common goods such as rice, canned goods, and other grocery items are starting to have the bullish price trends as well. This caused a domino effect that even sidewalk vendors tend to increase their price lists to make their ends meet. This is the reason why several sectors coin this TRAIN Law as Anti-Poor Law for they believe only those who are middle to high earners could benefit from it.
What about you? Do think this TRAIN Law would be helpful in Philippines' overall economy? Let me hear your thoughts.
References:
Here’s What the TRAIN Law Means for Filipinos
,some of the law implementedb are good like on cigarette and soda but this is only minimal ,? If they continously increase tax in car and fuel, this ia something that has effect ...we used fuel in everyday transaction ,therefore prices of some commodities using fuel will increase for sure..maybe the gov. Shd think it over again .
There are pros and cons on this law but the main pro is that Filipinos will be forced to quit eating junk foods but the con is with the fare will increase. Sana taasan din ang sweldo ng mga Pilipino.
This is very interesting! This was actually my thesis last year. We looked on the effect of increasing cigarette prices through the Sin Tax Reform law and found out that these were effective in curbing cigarette consumption. We even made a recommendation to further do more research on further increasing cigar prices along with other included in sin tax reform such as alcohol, junk foods and sugar beverages.
As a health care provider I am very much in support of this law. While most Filipinos may be disheartened by the abrupt rise in prices of these commodities, I believe it will be great in the long run. Cigarette, Alcohol, and Carbonated beverages have done an excellent job in tricking the masses that these goods are important but in truth these are just vices with companies earning so much without any benefit to the masses.
I also read about how car taxes were huge in other countries and its amazing how its already implemented here in the PH. In SG, a car is as costly as a lot whixh makes people resort to public transportation which is not only good for the environment but also for the traffic.
Taas kaayog comment haha. Im just so hyped at how our country is moving progressively. Thanks for sharing this ate
though its a big help we can't deny it.. pero meron paring loopholes yung ganitong implementasyon.. Sana sunod narin nila yung salary increase pero d nman medaling gawin yun.. masyado nang tumataas yung bilihin.. tinanggal nga nman nila.. pero halos nkapatong na sa commodities.. dun pa sa basic needs ng mga tao.. so domino effect pa din yun kung iisipin..
they are too fast to make a law that give the government lots of money while they are to slow on acting on how they can give Filipinos a better life by upgrading the salary of the Filipino workers.
tumataas ang mga bilihin pero ang sweldo, ganun pa rin. hahays
This price increase for cigarettes and softdrinks is fine with me. As you mentioned, it will help Filipinos to become healthy. For the tax increase in car and fuel, I should maybe read more. But as an environmentalist, increasing the tax for car and fuel might be a mitigation for CO2 emission. Hehehe
There's a part of me that is perfectly fine for additional car tax. I believe this could lessen the new purchases of vehicles crowding the roads hahaha
Much less traffic na, tingin ko hindi naman cguro pahirap ang train law, pinag-isipan din bago ginawa. Dami ng nagawa ng gobyerno ngayon, unti unting bumabalik tiwala ko.