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Tax Reform for Acceleration and Inclusion (TRAIN)

The Tax Reform for Acceleration and Inclusion (TRAIN) Act, officially cited as Republic Act No. 10963, is the initial package of the Comprehensive Tax Reform Program (CTRP) signed into law by President Rodrigo Duterte on December 19, 2017.The TRAIN Act is the first of four packages of tax reforms to the National Internal Revenue Code of 1997, or the Tax Code, as amended. This package introduced changes in personal income tax (PIT), estate tax, donor's tax, value added tax (VAT), documentary stamp tax (DST) and the excise tax of tobacco products, petroleum products, mineral products, automobiles, sweetened beverages, and cosmetic procedures.

Vision and goals of TRAIN

The TRAIN Act aims to address the reputed weaknesses of the Tax Code, specifically through the following objectives:

• First, it intends to simplify the previous system to make it more straightforward and intuitive.
• Second, it intends to create a more "just" taxation scheme, wherein taxation is staggered and distributed on the basis of financial capability and the underprivileged are able to reap more advantages.
• Third, it intends to improve the efficiency by which tax is collected, particularly tackling issues of compliance.
• Fourth, it increases the tax burden felt by the general population thus increasing the overall inflation rate.

The changes instituted by the tax reform is expected to be able to increase revenue to finance the infrastructure, healthcare and education programs of the Duterte administration. The notion that the poor will be taxed less than the wealthy population is actually a propaganda widely spread by the government, the additional taxes imposed by the government will just be passed down through the lower and middle income class thus increasing the inflation.

In the long term, TRAIN Act is just the first from a series of tax reforms, as part of the CTSP, which will be one of the principal means by which the 2020 and 2040 vision of the incumbent administration is to be achieved. The vision in 2020 is that poverty will be reduced from 21.6% to 14%, while 2040 sees the Philippines as having "eradicated extreme poverty", established "inclusive economic and political institutions where everyone has equal opportunities" and achieved "high-income country status". This can be achieved if economic growth can be sustained by at least 7% each year and if the source of growth can be shifted to investment from consumption. This means prioritizing investments on people through "health, education, life-long training, social protection, infrastructure, and research and development" and investments on infrastructure to boost productivity