IONTAXA

ONTAXAT
T
NTAXATI
I
TAXATIO
O
AXATION
N
NATIONT
T
TAXATION

Compulsory or coercive money collection by a levying authority,

usually a government

All types of involuntary levies from income to capital gains to estate

tax

An act, the resulting revenue is called taxes

TAXATION
means by which
government finance their
expenditure by imposing charges
on citizens and corporate
entities
means by which

government
expenditure by imposing charges
on citizens and corporate
entities
finance their

Use taxation to encourage or discourage economic decisions

Practice of the government collecting money from its citizens to pay for
public service like public libraries or park

Practice of collecting taxes from citizens based on their earnings and

property to support the government and allow to fund police, courts,
military, build and maintain roads

The price of being a citizen

means by which
public service like public libraries or park

government
Practice of collecting taxes from citizens based on their earnings and
property to support the government and allow to fund police, courts,
military, build and maintain roads
finance their

The price of being a citizen

expenditure by imposing charges
on citizens and corporate
entities Government compels taxation through force- penalties or imprisonment

Imposing institution to tax

Physical assets- property

Specific events- sales transaction

PHILIPPINE
TAXATION
 PHILIPPINE
TAXATION
Department of Finance- taxes are mandatory contributions of everyone to raise
revenue for nation-building

Revenue- use to pay our doctors, teachers, other government personnel and
officials, building schools, building

Why does the government collect taxes?- to provide basic services such
education, health, infrastructure, fund social services, human capital development;
part of taxes directly transferred to the
poorest through targeted transfer (4P’s, pension of senior citizen, PWD allowance,
Philhealth)

Who pay taxes?- We all pay taxes directly or indirectly. We pay taxes according
to our income or level of consumption
- We all pay taxes directly or indirectly. We pay taxes according PHILIPPINE
TAXATION

comebased on ability to
or level of consumption

pay principle wherein people

with higher income should pay
more
 PHILIPPINE
Who pay taxes?- We all pay taxes directly or indirectly. We pay taxes according to
our income or level of TAXATION

consumption
based on the
amount of goods and services
utilize, the more you consume,
the higher the tax you pay
 PHILIPPINE
TAXATION

Filipino residing in Filipino living abroad- Resident aliens and

the Philippines tax based non-resident
are tax based on income on income earned in the aliens in the
earned here and abroad Philippines Philippines- tax based
on their income earned
in the
country
 LEGAL
OF PHILIPPINE TAXATION

BASES
 LEGAL
OF PHILIPPINE
A. Constitution
BASES
TAXATION

Article VI, Section 28- “rule of taxation shall be uniform and equitable” and Congress
shall evolve a progressive system of taxation

B. National Law

1. National Internal Revenue Code - R.A No. 8424 or the Tax Reform Act of 1997

2. R.A No. 10963 or Tax Reform for Acceleration and Inclusion Act of 2017

3. R.A No. 7160 or Local Government Code of 1991

 LEGAL
OF PHILIPPINE
BASES
TAXATION
A. Constitution

Article VI, Section 28- “rule of taxation shall be uniform

and equitable” and Congress shall evolve a progressive
system of taxation
B. National Law

1. National Internal Revenue Code - R.A No. 8424 or the Tax Reform Act of 1997

2. R.A No. 10963 or Tax Reform for Acceleration and Inclusion Act of 2017

3. R.A No. 7160 or Local Government Code of 1991

Article VI, Section 28- “rule of taxation shall be uniform and equitable” and Congress shall evolve a progressive system of taxation

B. National Law
LEGAL
OF PHILIPPINE
BASES
TAXATION
1. National Internal Revenue Code - R.A No.
8424 or the Tax Reform Act of 1997
STATE POLICY:
2. R.A No. 10963 or Tax Reform for Acceleration and Inclusion Act of 2017

To promote sustainable economic growth through the rationalization of Under this:

3. R.A No. 7160 or Local Government Code of 1991

the Philippine internal revenue tax system, including tax administration;

to provide as much as possible, equitable relief to a greater number of • Income tax
taxpayers in order to improve levels of disposable income and increase • Estate and donor’s
economic activity ; and to create a robust environment for business to taxes
enable forms to complete better in the regional as well as the global • VAT
market, at the same time that the State ensures that Government is able to provide for • Excise taxes on
the needs of those under its jurisdiction and care certain goods
• Documentary
stamp tax
B. National Law
1. National Internal Revenue Code - R.A No. 8424 or the Tax Reform Act of 1997 LEGAL
OF PHILIPPINE
BASES
TAXATION
2. R.A No. 10963 or Tax Reform for Acceleration
and Inclusion Act of 2017
• To ensure that the government is able to
3. R.A No. 7160 or Local Government Code of 1991

• provide for the needs of those under its jurisdiction and

carethrough the provision of better infrastructure, health,
education,
• jobs, and social protection for the people.

• The TRAIN Act aims to make the Philippine Tax System

simpler, fairer, and more efficient to promote investments,
create jobs, and reduce poverty.

• aimed to generate revenue to achieve the

• 2022 and 2040 vision of the Duterte
• administration
1. National Internal Revenue Code - R.A No. 8424 or the Tax Reform Act of 1997

LEGAL
OF PHILIPPINE
BASES
2. R.A No. 10963 or Tax Reform for Acceleration and Inclusion Act of 2017

TAXATION
3. R.A No. 7160 or Local Government Code of
1991
It is hereby declared the policy of the State that the territorial and
political subdivisions of the State shall enjoy genuine and
meaningful local autonomy to enable them to attain their fullest
development as self-reliant communities and make them more
Includes local taxes:
effective partners in the attainment of national goals. Toward this • Real Property Tax
end, the State shall provide for a more responsive and accountable • Business Taxes
local government structure instituted through a system of • Professional Taxes
decentralization whereby local government units shall be given • Community Tax
more powers, authority, responsibilities, and resources. The • Tax on banks and
process of decentralization shall proceed from the national other financial
government to the local government units. institutions
 LEGAL
OF PHILIPPINE
BASES
TAXATION

BIR (Bureau of Internal Local treasurer’s office- collect

Revenue) tax at local level (provincial, city,
collect tax in national level municipal, barangay)
 LEGAL
OF PHILIPPINE
BASES
TAXATION
BIR (Bureau of Internal Revenue)
Power
collect tax inand Duty
national level

1. Reduction and collection of all internal revenue taxes, fees,

charges

2. Enforcement of forfeitures, penalties and fines. Execution of

judgements in all cases decided by Court of Appeals and ordinary
courts

3. Administer, supervise and police power by National Internal

Revenue Code
KINDS OF TAXES
DIRECT
INDIRECT
TAXES
TAXES
 KINDS OF TAXES
DIRECT
paid from your income and properties.
TAXES
Income Tax- direct Compensation
Business Income-
tax paid by Income- salaries, Passive Income-
practice of
individual or wages, taxable tax on deposits,
profession, trades,
organization bonuses, fringe royalties, dividends
sale of assets
imposed on benefits

Compensation and self- Self-employed If gross sales does not exceed

employment income- individuals and VAT threshold, they have
Individual earning option
Income Tax
professional- tax
compensation income to tax base on income tax Schedule for
are tax base on income
base on income tax schedule for individual and
schedule, applicable applicable percentage or flax
Individuals 2018-
tax schedule for
individuals. percentage tax, VAT tax rate of 8% on gross sales 2022
 KINDS OF TAXES
DIRECT
paid from your income and properties.
TAXES
Compensation and self- Self-employed
Annual Taxable
Income
Tax to Pay
employment income- individuals and Over Not Over
Individual earning professional- tax
compensation income
base on income tax ₱0.00 ₱250,000.00 0% or zero tax
are tax base on income
tax schedule for schedule, applicable ₱250,000.00 ₱400,000.00 20% of excess over
individuals. percentage tax, VAT ₱250,000.00
₱30,000.00 + 25%
₱400,000.00 ₱800,000.00 excess over
₱400,000.00

₱130,000.00 + 30%
If gross sales does not exceed
₱800,000.00 ₱2,000,000.00 of excess over
VAT threshold, they have ₱800,000.00
option
Income Tax
to tax base on income tax Schedule for ₱490,000.00 + 32%
schedule for individual and
Individuals 2018- ₱2,000,000.00 ₱8,000,000.00 of excess over
applicable percentage or flax ₱2,000,000.00
tax rate of 8% on gross sales 2022
₱2,410,000.00 + 35%
₱8,000,000.00 of excess over
₱8,000,000.00
 KINDS OF TAXES
DIRECT
paid from your income and properties.
TAXES Annual Taxable
Income
Tax to Pay
Over Not Over
₱0.00 ₱250,000.00 0% or zero tax
Annual Taxable
Income
Tax to Pay
₱250,000.00 ₱400,000.00 20% of excess over
Over Not Over ₱250,000.00
₱0.00 ₱250,000.00 0% or zero tax ₱30,000.00 + 25%
₱400,000.00 ₱800,000.00 excess over
₱400,000.00
Income: ₱100,000.00 ₱130,000.00 + 30%
₱800,000.00 ₱2,000,000.00 of excess over
₱800,000.00

₱100,000.00 0% tax rate = zero tax ₱490,000.00 + 32%

₱2,000,000.00 ₱8,000,000.00 of excess over
₱2,000,000.00

₱2,410,000.00 + 35%
₱8,000,000.00 of excess over
₱8,000,000.00
 KINDS OF TAXES
DIRECT
paid from your income and properties.
TAXES Annual Taxable
Income
Tax to Pay
Over Not Over
₱0.00 ₱250,000.00 0% or zero tax
Annual Taxable
Income
Tax to Pay
₱250,000.00 ₱400,000.00 20% of excess over
Over Not Over ₱250,000.00
₱250,000.00 ₱400,000.00 20% of excess over ₱30,000.00 + 25%
₱250,000.00 ₱400,000.00 ₱800,000.00 excess over
₱400,000.00

₱130,000.00 + 30%
Income: ₱320,000.00 ₱800,000.00 ₱2,000,000.00 of excess over
₱800,000.00

₱490,000.00 + 32%
₱2,000,000.00 ₱8,000,000.00 of excess over
₱2,000,000.00
x ₱2,410,000.00 + 35%
₱8,000,000.00 of excess over
₱14,000.00 ₱8,000,000.00
 KINDS OF TAXES
DIRECT
paid from your income and properties.
TAXES Tax to Pay
Annual Taxable
Annual Taxable
Income
Tax to Pay
Income
Over Not Over
Over Not Over
₱0.00 ₱250,000.00 0% or zero tax
₱30,000.00 + 25%
₱400,000.00 ₱800,000.00 excess over ₱250,000.00 ₱400,000.00 20% of excess over
₱400,000.00 ₱250,000.00
₱30,000.00 + 25%
Income: ₱700,000.00 ₱400,000.00 ₱800,000.00 excess over
₱400,000.00

₱130,000.00 + 30%
₱800,000.00 ₱2,000,000.00 of excess over
₱800,000.00
x ₱75,000.00 ₱490,000.00 + 32%
+₱30,000.00 ₱2,000,000.00 ₱8,000,000.00 of excess over
₱2,000,000.00
₱105,000.00 ₱2,410,000.00 + 35%
₱8,000,000.00 of excess over
₱8,000,000.00
 KINDS OF TAXES
Interest income- bank deposit, trust funds; tax at rate of 20% DIRECT TAXES
Royalties- except on books, literary works and musical composition; tax at rate of 10%

Prices and winnings from PCSO Lotto in excess of 10,000 are tax at rate of 20%, below 10,000 are tax base on
income tax for individuals

Income tax from depository bank under expanded foreign currency deposit system is tax at rate of 15%

Income from long-term deposits and investments when pre terminated in less than 3 years after making deposit or
investment is tax at rate of 20%, less than 4 years, 12%, less than 5 years, 5%

Dividends- 10% tax

Capital gains- from sale of share of stocks not traded in tax exchanged-15% tax

Capital gains from sale of real property are tax at 6% except when use to construct new property within 18 months
after sale occur

Income tax for corporation is 30%

 TAXES
KINDS OF TAXES
INDIRECT
based on consumption
TAXES
VAT- Value Added Percentage Tax- Excise Tax- indirect tax
Tax impose on goods business tax on goods
and and services that have
imposed on person/
negative
services; pass to transaction: externalities and non-
buyer as part of sell or lease goods, essential; can
selling price; 12% properties, be specific or ad
rate since 2006 services valorem

Gross annual sales is

Imported and domestic below
goods and 1,919,500, not VAT
services are covered by registered are
VAT but exempt on VAT under
there are exemptions as Section 109
found in of National Internal
Section 109 of Tax Code Revenue Code
 TAXES
KINDS OF TAXES
INDIRECT TAXES

e Tax-
tax
person/
on: Excise Tax- indirect tax on goods
goods, and services that have negative
es,
s
externalities and non-essential; can

be specific or ad
sales is
valorem based on weight, volume
ot VAT
are capacity, any other physical unit
T under
09
nternal
of measurement
Code
 TAXES
KINDS OF TAXES
INDIRECT TAXES

e Tax-
tax
person/
Excise Tax- indirect tax on goods
on:
goods, and services that have negative
es, externalities and non-essential; can
literally meaning
ad
s
be specific or “according to value”, based on
selling price. A measure to
sales is

ot VAT
valorem discourage too much consumption
are
T under
of scarce resources and limit the
09 bad effects of some products
nternal
Code
 TAXES
KINDS OF TAXES
INDIRECT TAXES

e Tax-
tax
person/ Commodities subject to excise
on: tax: Sin products (alcohol,
goods,
es,
Excise Tax- tobacco), petroleum,
s indirect tax on goods miscellaneous articles
and services that have negative
externalities and non-essential; can (automobiles, jewelry, perfume,
sales is
be specific or ad valorem toilet waters, yachts, vessels for
ot VAT pleasure and sports) and mineral
are
T under products
09
nternal
Code
 KINDS OF TAXES
NATIONAL TAXES
Income Tax (Compensation, Business, Passive)
Estate Tax
Donor’s Tax
VAT
Percentage Tax
Excise Tax
Documentary Stamp Tax
 KINDS OF TAXES
LOCAL TAXES
Real property tax- one of main sources of revenues of local
government units; tax on all types of real properties like lands,
building, improvements, machinery

Local ordinance- parking fees

 BRIEF
OF PHILIPPINE TAXATION

HISTORY
 SPANISH ERA BRIEF
OF PHILIPPINE TAXATION
AMERICAN ERA HISTORY
JAPANESE ERA

POST WAR ERA

MARCOS

AQUINO

RAMOS

ESTRADA

ARROYO

AQUINO

DUTERTE
 SPANISH ERA BRIEF
OF PHILIPPINE TAXATION
A HISTORY
A

A Contador de’
Resultas- serve as
S Chief Royal Taxes collected varies Spanish treasury-
Accountant; function from tribute or head subsidize the
similar to tax of one gold maiz Philippines in
O Commissioner of annually, tax on value amount of P250,000
Internal Revenue; of jewelries and gold per annum due to
S Chief Arbitrator whose trinkets, indirect taxes poor financial
decision on financial on tobacco, wine, condition of the
matters are final except cockpits, burlas and
A country
when revoke by powder
Council of Indies
O

E
A
AMERICAN ERA BRIEF
OF PHILIPPINE TAXATION
HISTORY
A August 1, 1904-
BIR was formally
Luke E. Wright- organized and
A operational under
1898-1901- ruled 1902- first civil second civil
Secretary of
by American government governor; BIR Ellis Cromwell-
Finance, Henry Ide (
S military establish under was created on author of Internal
second collector
governors William H. Taft July Revenue Law
2, 1904 of 1904) with John
O S. Hord as
first collector
S

E
A
AMERICAN ERA BRIEF
OF PHILIPPINE TAXATION
HISTORY
A William T.
Holting- third First 3 Filipino
collector; BIR Collectors:
A
collection made James J. US Pres.
Wenceslao
by Rafferty- fourth McKinley-
Trinidad
S Real Estate and American Filipinization
License Division collector policy Juan Posadas Jr.
were confined to
O revenue accruing Alfredo Yatao
to City of Manila
S

E
A
JAPANESE ERA BRIEF
OF PHILIPPINE TAXATION
A HISTORY

A Bureau was combined with

Customs Office and headed
S
by Director of Customs and
O Internal Revenue

E
A
POST WAR ERA BRIEF
OF PHILIPPINE TAXATION
A HISTORY
A
R.A 690- adopt the
31 inspection withholding
units- country is tax system; January 1957-
divided; each is collecting income
S July 4, 1946- under Provincial
title of head of
tax upon receipt 1955- regional Bureau was
Philippines gained Revenue Agent result to office set up in
O changed from
independence from and City Revenue collection of 25% Cebu and Davao Collector to
US Agent in of total income Commissioner
S distilleries and tax collected
tobacco during the said
factories period
A

E
A
POST WAR ERA BRIEF
OF PHILIPPINE TAXATION
A HISTORY
A
Tax Census
Division- establish June 19,1959-
to Rewards Law (R.A
No. 233); strictly Tobacco
consolidate all Inspection Board
enforce the
S statements of and
Jose Arenas- last payment of taxes
assets, income and and discourage Accountable
Collector and
O liabilities of tax evasion where Forms Committee
first Commissioner
all individuals and informers were created directly
of BIR
resident rewarded 25% under Office of
S corporations in the equivalent of the Commissioner
Philippines by revenue collected
A a National Tax from tax evader
Census
O

E
A
MARCOS BRIEF
OF PHILIPPINE TAXATION
A ADMINISTRATIO HISTORY
A
N
A “Voluntary
Compliance
Program”-
Misael Vera-
to encourage TAN- Tax account
implement “Blue
professional in Number; used
O Master-Program”
private and for faster
to curb abuses of verification of tax
government sectors
both taxpayer and records
S to
BIR personnel
report their true
income and pay
A
correct taxes

E
FERDINAND MARCOS SR.
A
MARCOS BRIEF
OF PHILIPPINE TAXATION
A ADMINISTRATIO HISTORY
A
N
A

Bureau’s National
Martial Law- tax
Office- National Internal
amnesty
transferred from Revenue Code
O decrees- issue to
Finance of 1977- updated the
enable erring 1934 Tax
Building in Manila
taxpayers to start Code
S to its own building
anew
in Quezon City
A

E
FERDINAND MARCOS SR.
A
AQUINO BRIEF
OF PHILIPPINE TAXATION
A ADMINISTRATIO HISTORY
A
N 1988- VAT was
Jose Ong-
improve tax
A introduced
collection
“Operation: and simplified
Walang 1986 Tax
S tax
Lagay”- Reform
January administration
Program- adapt
launched to 30,1987- the VAT system;
promote Bienvenido Tan, TIN- Tax
design to
efficient and Jr.- reorganized Identification
simplify
S honest the Bureau Number;
tax
collection of replace the TAN
administration
taxes or Tax Account
A and make tax
Number
system more
equitable
O

E
CORAZON AQUINO
A
RAMOS BRIEF
OF PHILIPPINE TAXATION
A ADMINISTRATIO HISTORY
A
Liwayway
N
A Vinzons-Chato - 5 year Tax
implement the Computerization
S Action Centered Project (TCP)-
Transformation establishment of
O Program (ACTS) to
realign and
modern and
direct the entire computerized
organization for Integrated Tax System
fulfillment of its mission and Internal
A and Administration System
vision
O

E
FIDEL V. RAMOS
A
ESTRADA BRIEF
OF PHILIPPINE TAXATION
A ADMINISTRATIO HISTORY
A
N
A
Beethoven Rualo- enhance
S voluntary compliance and Raffle promo- Humingi
implemented the Economic
ng Resibo,
Recovery Assistance
O Payment
Manalo ng Libo-Libo-
(ERAP) Program- granted institutionalized to
immunity from audit and encourage
S investigation to taxpayer who consumers to demand
paid 20% more than the tax sales
paid in 1997 for income tax, invoices and receipts
VAT or
percentage tax
O

E
JOSEPH ESTRADA
A
ESTRADA BRIEF
OF PHILIPPINE TAXATION
A ADMINISTRATIO HISTORY
A
Dakila Fonacier-
N Large Taxpayer Services
(LTS)
A implemented full and Excise Taxpayers
utilization of tax Service
computerization, (ETS)- enforce tax
S use of electronic administration
documentary stamp metering
and enforcement
O machine and
tie-up with national capabilities of BIR
government
S agencies and local Full Integrated Tax
government unit System (ITS)
for remittance of withholding Rollout Acceleration
tax; Compromise Settlement Program for
Program-
full utilization of tax
for taxpayers with account
O computerization in
receivable and disputed
assessment with BIR Bureau’s
O operation

E
JOSEPH ESTRADA
A
ARROYO BRIEF
OF PHILIPPINE TAXATION
A ADMINISTRATIO HISTORY
A
N
A Atty. Rene G. Guillermo
Bañez- Creditable eFPS- Parayno Jr.-
implemented offered
S withholding tax Electronic
Voluntary Voluntary
system- Filing and
Assessment Assessment and
Program and
technology- Payment Abatement
O based system
Compromise System- adopt Program (VAAP)
Settlement that promotes to
S Program paperless filling the
taxpayers with
and creditable of payment of under-declared
withholding tax tax returns taxes sales/receipts/
A system income

E
GLORIA MACAPAGAL -
ARROYO
A
ARROYO BRIEF
OF PHILIPPINE TAXATION
A ADMINISTRATIO HISTORY
A
Reconciliation of
N
Jose Mario C.
Buñag- expand the Nationwide
A Listings for RATE Program to Rollout of
Enforcement or Regional
Computerized National
Offices; inclusion of Program
RELIEF System System
S to detect under-
new
Support for Tax
payment gateways like (NRCS)-
declaration of Efficient Administration
Service Machine and extend use of
O taxable income Reform
by taxpayers
G-Cash and Integrated Tax
Smart Money (NPSTAR)-
System across improve BIR in
facilities, install
S RATE- Run After E-Complaint System- its various area of
Tax Evaders new non- tax
Program- sued e-Service that allow
computerized administration
A high-profile tax
taxpayers to
log their complains Revenue
evaders through BIR District Office
Website

E
GLORIA MACAPAGAL -
ARROYO
A
ARROYO BRIEF
OF PHILIPPINE TAXATION
A ADMINISTRATIO HISTORY
A
N Taxpayer
A Feedback
Mechanism-
S Computer- Joel L. Tan-
Sixto S. Complaints on
Assisted Audit Torres- public
Esquivias IV- eering BIR
Tools awareness
O close erring employees and
and Techniques campaign on
business under taxpayers who
(CAATTs)- enforcement
Oplan Kandado do
S enhance audit and taxpayer’s
Program not pay taxes or
capabilities service program
issue
A OR’s/invoices
are reported

E
GLORIA MACAPAGAL -
ARROYO
A
AQUINO BRIEF
OF PHILIPPINE TAXATION
A ADMINISTRATIO HISTORY
A
N
A

S Collect more
Kim S. Jacinto- than one-half
O Henares- focus on
filing of tax
of
S evasion cases total revenue
of government
A

E
BENIGNO AQUINO III
A DUTERTE BRIEF
OF PHILIPPINE TAXATION
A ADMINISTRATIO HISTORY
A
N
A
Signed R.A 10963 or Tax Reform
S for Inclusion and Acceleration Act
of 2017- lowered personal income
O tax rate but increase taxes on
certain goods, leading to net
S increase in revenue. This excess
revenue will fund public
A infrastructure

RODRIGO DUTERTE
 certain goods, leading to net
increase in revenue. This excess
DUTERTE
revenue will fund public BRIEF
infrastructure OF PHILIPPINE TAXATION
ADMINISTRATIO HISTORY
N
Tax Reform Program

TRAIN- Tax Reform for

Acceleration and Inclusion- first
package of comprehensive tax
reform program (CTRP) by Pres.
Duterte’s administration

RODRIGO DUTERTE
 Seek to correct number of deficiencies in tax system to make
it simpler, fairer and more efficient

Tax Reform Designed to redistribute some of the gains to the poor

Program
TRAIN- Tax Reform for
Acceleration and Inclusion- first
Lower and simplify personal income taxes, simplify estate
and donor’s tax, expand VAT, adjust oil and automobile
excise tax and excise tax on sugar-sweetened beverages
package of comprehensive tax
reform program (CTRP) by Pres.
Duterte’s administration
o
WHAT
WILL
TAX
REFOR
M
FUND?
• Up

• H
o
WHAT
WILL
TAX
REFOR
M
FUND?
EDUCATION
• 100% enrollment and
completion rates

• Build 113,553 more classroom

• Hire 181,980 more teachers

between 2017-2020
• Up

• H
o
d WHAT
WILL
TAX
roomREFOR
M
hers FUND?
HEALTHCARE SERVICES
• Upgrade 704 local hospital and establish 25 local hospital

• Achieve 100% Philhealth coverage

• Upgrade/relocate 263 rural and urban health units to

disaster-resilient facilities

• Build 15,988 new barangay health stations

• Build 2,424 new rural health units and urban health centers

• Hire additional 2,424 doctors, 29,466 nurses, 1,114 dentists,

3,288 medical technologist, 911 public health associates
and 2,497 UHC implementers
o
CES
al hospital

d WHAT
WILL
TAXfacilities
ter-resilient

roomREFOR
ons
M
alth centers
hers FUND?
ists, 3,288 medical
HC implementers
INFRASTRUCTURE PROGRAMS

Major highways,
expressways, flood control
projects
 6 MAIN FEATURES OF

TRAINLA
W
 TRAIN
LAW
Lowering Personal Income Tax (PIT)
• Those with annual taxable income below P250,000 are exempt from paying PIT

• Rest of taxpayer, except the richest, see lower rates from 15% to 30% by 2023
•
• Top individual taxpayer who exceeds 8 million, face higher

• Tax rate from 32% to 35%

• 32% tax- income of 500,000 annually but TRAIN will bring it down to 25%

• Minimum wage earners- exempted from income tax as their income is below P250,000
 TRAIN
LAW
Simplifying Estate and Donor’s Tax
• Lowered and harmonized so it does not matter if the person pass away, donated a property or
transfer a property

• Loss in revenue but make land market more efficient so that land will go to its best use
 TRAIN
LAW

Tax rate of 6% base on the net

value with standard reduction of
P5million and exemption for first
P10 million for family home

plifying Estate and Donor’s Tax

Lowered and harmonized so it does not matter if the person pass away, donated a property or transfer a property

Loss in revenue but make land market more efficient so that land will go to its best use
 TRAIN
LAW

Rate of 6% of net donations for

gifts above P250,000 yearly
regardless of relationship to the
donor

e and Donor’s Tax

harmonized so it does not matter if the person pass away, donated a property or transfer a property

ue but make land market more efficient so that land will go to its best use
 TRAIN
LAW
Expanding VAT
• Philippines- one of has highest VAT rates but has highest number of exemptions in Southeast Asia Region

• Collect same VAT revenues as Thailand who had 7% while Philippines has 12%

• TRAIN- aims to clean VAT system by limiting VAT exemptions to necessities like raw agriculture food, education and health

• Use budget to provide targeted transfers and programs that are more transparent and accountable

• Repeals 54 out of 61 special laws with non-essential VAT exemptions

• Purchase of senior citizen and PWD will continue to exempt from VAT

• Housing below P2 million will exempt from VAT on 2021

• Medicines for diabetes, high cholesterol and hypertension will exempt from VAT on 2019
 TRAIN
LAW
Increasing Fuel Excise Tax
• TRAIN increase excise of petroleum products which is not adjusted since 1997

• Fuel excise- wrongly perceived as anti-poor

• Family Income and Expenditure Survey (FIES) 2015- top 10 riches

• Households consume 51% of total fuel consumption

• Top 1 richest household- consume 13%, equivalent to aggregate consumption of bottom 50% of household

• This is a tax that will affect the rich more than the poor

• Address environmental and health concerns

 TRAIN
LAW
Increasing Fuel Excise Tax
• One consequence of exempting diesel from excise is the shift from gasoline to diesel automobiles

• Cheaper diesel prices, consumer shifted to diesel SUVs

• 2013- 72% of newly register SUVs are diesel power than 28% of gasoline

• 2016- despite P14 increase in Diesel oil price from P18.25 to P32.10, inflation remain low and stable

• 2 major economic shock:

VAT reform of 2005
Global oil price hike in 2011

• After VAT Reform in 2005- FDP growth slowed as consumption slowed down and inflation increase but economy did
not

• Collapsed and inflation was manageable

 TRAIN
LAW
Increasing Excise Tax of
Automobiles
• TRAIN simplifies excise tax on automobile but power price cars continue to
be tax at lower rates while more expensive cars are tax at higher rate

• Raise revenue as richer buyers tend to own expensive cars compared to those
who earn less
 TRAIN
LAW
Increasing the Tax of Sugar-Sweetened Beverages
• Promote a healthier Philippines

• Part of comprehensive measure to curb the consumption of SSB and worsen number of
diabetic person and obesity

• Encourage consumption of healthier products, raise public

• Awareness of harms of SSBs

 TRAIN
LAW
Increasing the Tax of Sugar-Sweetened Beverages
Why impose tax on SSBs?
• Most SSB provide unnecessary or empty calories with little or no nutrition. SSB is not substitute for healthy
foods like fruits and rice

• SSB are affordable to children and the poor who are most vulnerable to the negative effects on health

• SSBs are easily accessible and found in any store

Examples of SSB: carbonated beverage, sports and energy drinks, sweetened juice drinks

• Excise rate of P6 per liter- drinks containing caloric or non-caloric sweetener and P12 per liter on

• Drinks with high-fructose corn syrup. 3 in 1 coffee and milk are exempted in this tax