TRAIN Tax Reform

[Petey]

Hello all. It's been a while. Hope everyone is doing well.

 

I had a browse thru the forums regarding the new TRAIN Tax Law, but didn't find anything. I thought i would ask the community what their thoughts are... for the expat and also for the family in general?

Pretty sure people who are interested in this topic may already be aware of the changes, but those who haven't i'll pop this link up. https://www.pinoymoneytalk.com/philippine-tax-reform-list-of-new-taxes/  It certainly seems that they have taken a sledgehammer to a nutshell with this. I'm no expert, but i do worry when i see price jumps in my shopping and bills.

 

The poorest will be hit hardest. Persons making under minimum wage - though will have 0% Tax Rate off their income, they will be hit hard because the increase in amenities and food costs due to the TRAIN Tax. Micro and small businesses will also take a huge slap to the face because of purchasing stock for the business.

 

Today i had a text from my bank telling me that i have to pay Tax on my mortgage documents. Why? I have no clue. We already signed a contract 3yrs back and now they want to change something that we never even considered. Certainly unfair. But makes me worried that they will want to retro-implement the payments... for reasons. But i'll hopefully find out tomorrow.

 

 I would be interested to see what others feeling and thoughts are, especially from the expats that are living here long term. 

 

Many thanks.

[Dave Hounddriver]

Thanks for the list of new taxes.  Its the gasoline increase that hurts me the hardest.  It will not hurt much for short trips on a motorcycle but long trips with the car will be more costly.  Shame that the tax on gas includes, accidentally, a tax on water which is almost always in the gas as they never drain their storage tanks so I end up buying water in my gas 

[Jollygoodfellow]

2 hours ago, Petey said:

The poorest will be hit hardest. Persons making under minimum wage - though will have 0% Tax Rate off their income, they will be hit hard because the increase in amenities and food costs due to the TRAIN Tax. Micro and small businesses will also take a huge slap to the face because of purchasing stock for the business.

I think you have read this wrong. The poorest or low income earners now pay no tax or less than before.

Lower income tax rates, with exemption for those earning P250,000 and below (Years 2018-2022)
In the approved tax reform bill under the Tax Reform for Acceleration and Inclusion (TRAIN) program:

Those earning an annual salary of P250,000 or below will no longer pay any income tax.

Edited March 1, 2018 by Jollygoodfellow
Added

[fillipino_wannabe]

Pretty sure most people will be much better off. I don't really see how the few extra pesos here and there on gas etc will make up for the massive cuts in income tax for the government.

Obviously not great for expats though

[sonjack2847]

The people who will be hit the hardest are the people who earn 2-300 pesos a day.These little tax increases are not little to them.

[Petey]

On 3/1/2018 at 10:15 PM, Jollygoodfellow said:

I think you have read this wrong. The poorest or low income earners now pay no tax or less than before.

Lower income tax rates, with exemption for those earning P250,000 and below (Years 2018-2022)
In the approved tax reform bill under the Tax Reform for Acceleration and Inclusion (TRAIN) program:

Those earning an annual salary of P250,000 or below will no longer pay any income tax.

I don't believe i have misread this. If a person is earning towards the P250,000 threshold, then sure, they will benefit more so than someone self employed like a fishball and taho seller aren't gonna be making close to P250,000. These people will he affected.

 

The less people earn/have the harder they will be hit.

[Jollygoodfellow]

47 minutes ago, Petey said:

I don't believe i have misread this. If a person is earning towards the P250,000 threshold, then sure, they will benefit more so than someone self employed like a fishball and taho seller aren't gonna be making close to P250,000. These people will he affected.

 

The less people earn/have the harder they will be hit.

I still dont get it. People on low income pay no tax under the new system. 

 

On 3/1/2018 at 9:37 PM, Petey said:

The poorest will be hit hardest. Persons making under minimum wage - though will have 0% Tax Rate off their income

This is what you said above but they now have 100 percent off, no tax payable so they are gaining. Think of the average waiter who earns around 350 a day so say less than 123k a year now pay zero tax so it's in their pocket. 

[OnMyWay]

6 minutes ago, Jollygoodfellow said:

I still dont get it. People on low income pay no tax under the new system.

I think his premise is that poor people will pay more for goods and services because the overall tax plan will increase prices on the basic things the poor purchase.  I don't know enough about it to comment one way or the other.

[hk blues]

The basic concept was to reduce/remove income tax liability for the poorer and increase for the richer. To balance the books, taxes increased on some goods ans services. In theory, the richer will he harder hit as they earn more and consume more.

In theory...

[sonjack2847]

Although the have changed the tax threshold it will hit some of the poorer people.There have been increases on petrol and gas along with some other things.Trike and jeepney drivers along with taxi drivers now have to find more money to do their jobs.Will there,has there been an increase in fares so again the poor who rely on trikes and jeepneys will also be hit.