BNF EXPLAINED: THE ANATOMY OF THE TRAIN (Package 1)

​Ignorance of the law excuses no one and BNF sums up all the important provisions of the new tax law that every Filipino must know. Increase on take home pay of most Filipinos belong to the middle class will be the most positive effect of TRAIN Law.

New tax system is backed up by the RA 10963 which was signed by President Rodrigo Duterte early this year. It features zero tax rate to the people earning P250,000 annually and below and 35% tax rate to 8-million-and-above earners. It is higher than the predecessor tax system with 32 % but the difference is that percentage is for the earning of 500,000 pesos and up.

Aside from the income tax, there will be changes on the rates of tax on the Sweet Beverages, fuel, coal, estate, automobile, tobacco and cosmetics.

Those features of the new tax system have salient motives which are to ease the traffic, to lessen the carbon emission that contributes to the climate change, and for the continuous promotion of public health.

Some taxes have no fixed rate because annually, the percentage may increase annually as prescribed by the law. Excise tax on fuel, coal and tobacco will increase on various percentages starting 2019.

According to the Department of Finance, the government’s income from TRAIN Law will fund the pet project of the government, the ‘Build,Build,Build’ infrastructure project that eventually help to elevate the economic growth of the Philippines.

The new tax reform strengthens the progressive tax system of the country. After the initial ride of the TRAIN Law’s first package, Congress will start to maneuver the second package into the railroad of unknown economic effect.