Duterte signs TRAIN tax reform, 2018 budget into law

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Image: CNN Philippines

MANILA – President Rodrigo Duterte on Tuesday (December 19) signed into law the Tax Reform for Acceleration and Inclusion (TRAIN) at Malacañan Palace.

He was surrounded by his economic team, as well as the leaders of the House of Representatives and the Senate.

Duterte said the TRAIN, together with the 2018 General Appropriations Act (GAA), which he also signed, is the fulfillment of his campaign promise to institute fiscal reform that will be felt by every Filipino.

In his speech, he said both are the nation’s initial steps towards cutting the poverty rate at 14 percent and making the Philippines an upper middle class nation by 2022, although he joked, “Hindi kaya ito apurado (Aren’t we rushing things)?”

The TRAIN, he added, is “the administration’s biggest Christmas gift to the Filipino people,” as those earning below P250,000 a year will be exempt from income tax starting 2018.

According to Presidential Spokesperson Harry Roque in a press conference earlier that day, TRAIN will generate P120 billion for the government, 70 percent of which will go to the Duterte administration’s “Build, Build, Build” infrastructure program. 30 percent will go to social and mitigating measures – meaning for public services and for the poorest Filipinos who will be negatively affected by it.

“We have provided for mitigation, realizing that the poorest of the poor would need some kind of assistance as a result of TRAIN,” Roque explained. TRAIN allocates funds for cash transfers to the poorest 10 million families – P200 monthly in 2018, P300 monthly in 2019, and P300 monthly in 2019.

The amount is regardless of the size of the family.

Roque said the dole-outs would be enough to offset costs the poor may have to bear under TRAIN. He explained that many of the new excise taxes will not amount to much for the poor, because the amount of taxes they will have to pay depends on how much they consume. If one is marginalized, he said, his or her consumption is “very low”.

The infrastructure under the Department of Social Welfare and Development’s conditional cash transfer program will be used to facilitate the cash transfers under TRAIN.

The dole-outs will begin “usually 30 days” upon publication in two newspapers of general publication, and on The Official Gazette.

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