RA 10963: Tax Reform for

Acceleration and Inclusion

(TRAIN) – BIR Training of
Trainers
National Training Center – BIR, NOB
22 – 24 January 2018
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Background on the Tax Reform

 The Tax Reform for Acceleration and inclusion amends certain
provisions of Republic Act No. 8424 (The National Internal
revenue Code of 1997), as amended.
 The enrolled bill was sent to President Duterte for approval and
was signed into law as Republic Act No. 10963 on December
19, 2017. The law takes effect January 1, 2018 following its
complete publication in the Official Gazette last December 27,
2017.
 The President has issued a separate letter vetoing five
provisions of the signed TRAIN law.
 The law is just the first tax reform package. The second
package (reduction of corporate income tax and rationalization
of fiscal incentives) is estimated to be released by early 2018.
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Key amendments
1. Individual Income Tax 9. Excise Tax on:
2. Final Income Tax  Automobiles
3. Estate Tax  Petroleum products
4. Donor’s Tax  Sweetened beverages
5. Value Added Tax  Mineral products
6. Documentary Stamp Tax  Cosmetic procedures
7. Some administrative (non-essential
provisions services)
8. Penalties
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What is the purpose of TRAIN?

The purpose of TRAIN is to make
our country’s tax system
The purpose of TRAIN is to make
our country’s tax system
The purpose of TRAIN is to make
our country’s tax system
 It is the first package in the Comprehensive
Tax Reform Program (CTRP) which is expected
to generate

Php 130 Billion

in revenues for the government.
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What is TRAIN?
The goal of the first package of the CTRP or
TRAIN is to create a simpler, fair, and more
efficient system, as per the constitution,
where the rich will have a bigger contribution
and the poor will benefit more from the
government’s programs and services.
 Lowering the Simplifying Estate Simplified Value Added
Personal Income Tax and Donor’s Tax Tax (VAT) System

Increasing the Excise Tax Increasing the Excise Introducing an Excise

on Petroleum Products
Tax on Automobiles Tax on Sweetened
Beverages
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The Vision of TRAIN by 2020….

Poverty rate Law abiding Peace within Achieve high

reduced from country middle income
the country
status, where
26% to 17% and per capita
(or some 10 neighbors increases from
million USD3,000 to
Filipinos USD4100 by
uplifted from 2022 in today’s
poverty) money
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The Vision of TRAIN by 2040….

Extreme Inclusive Achieve high

economic income
poverty
status where
eradicated and political
per capita
institutions increased
where from USD
everyone has 30,000 to
equal USD 12,000
opportunities by 2040 in
today’s
money
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What is the motive for TRAIN?

 “The benefits to be derived from this tax reform
measure will sustainably finance the government’s
envisioned “BUILD, BUILD, BUILD, CAMPAIGN”,
that pushes for massive investments in
infrastructure thereby encouraging economic
activity and job creation, as well as fund the
desired increase in the public budget for health,
education and social programs to alleviate poverty.
 Benefits of TRAIN

Higher budget for Infrastructure development

• Job Creation
• Lower cost of transporting goods and services

Higher efficiencies, increase in business

activities and revenues
• Attract Investors
• Better quality of life for Filipinos
 Benefits of TRAIN

Higher budget for education

• Competitive advantages for new graduates
• Better employment viability
• Higher pay potentials
• Attract investors
• Better quality of life for Filipinos
 Benefits of TRAIN

Higher budget for health

• More public hospitals and clinics
• Better public access to better health care
• Stronger work force
• Attract investors
• Better quality of life for Filipinos
 Benefits of TRAIN

Higher budget for Social Protection, Welfare and

Employment
• Better government relief and assistance programs
• Better subsidies
• Better social security and overall peace and order
• Better quality of life for Filipinos