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Tax Reforms
Package 1 Train Law
Status
Effective
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Supporting documents
Republic Act No. 10963 (with Veto Message)
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Signed into law
December 19 2017
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Date of publication
December 28, 2017
Effective date
January 1, 2018
“Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) was passed into law on December 19, 2017. The TRAIN law aims to enhance the progressivity of the tax system through the rationalization of the Philippine internal revenue tax system, thereby promoting sustainable and inclusive economic growth; to provide, as much as possible, an equitable relief to a greater number of taxpayers and their families in order to improve levels of disposable income and increase economic activity; and to ensure that the government is able to provide for needs of those under its jurisdiction and care through the provision of better infrastructure, health, education, jobs, and social protection of the people.
The TRAIN law provides, among others, the:
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Reduction in personal income tax rates
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Simplified tax for self-employed individuals
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Reduction in estate tax and donor’s tax rates
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Expanded Value-added Tax (VAT) base
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Adjusted excise tax rates
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Introduction of excise tax on sugar sweetened beverages and excise tax on non-essential services (cosmetic procedures)”
Revenue issuances issued by the BIR
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Package 1b: Tax Amnesty
Status
Effective (except “ The General Tax Amnesty”)
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Supporting documents
Republic Act No. 10963
Republic Act No. 10963 (with Veto Message)
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Signed into law
February 14, 2019
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Date of publication
February 18, 2019
Effective date
March 5, 2019
“The law provides for estate tax amnesty and tax amnesty on delinquencies.
The grant of a tax amnesty on delinquencies is a novelty. It allows delinquent taxpayers a chance for a fresh start and also help clear the dockets of the BIR so that they can focus their attention on more pressing cases.
On the other hand, the estate tax amnesty allows unpaid estate tax obligations to be settled at the rate of 6%, without any penalties imposed. This covers the estates of decedents who passed away on or before Dec. 31, 2017, with or without tax assessments issued by the BIR and that have remained unpaid as of the same date. The amnesty also covers “undeclared estates” or properties that were not included in a previously filed estate tax return and not subjected to estate tax.”
Revenue issuances issued by the BIR
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Motorcycle Vehicle Users Charge
“Package 1C aims to provide adequate funding for the maintenance of national and provincial roads. It also aims to address air pollution from motor vehicles. the Department of Finance proposes to increase the MVUC rates with the following features:
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Impose a unitary rate based on weight for all vehicles, private or government and for hire vehicles.
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Adopt a longer phased-year period of 3 years to increase MVUC rates.”
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Status
DOF Proposal Stage
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Package 2: CREATE Act
Status
Effective (except “ The General Tax Amnesty”)
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Supporting documents
Republic Act No. 11534
Special SGV CREATE Infographic
Signed into law
March 26, 2021
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Date of publication
March 27, 2021
Effective date
April 11, 2021
“The CREATE Act is said to be the first-ever revenue-eroding tax reform package and the largest economic stimulus program in the country’s history, with major amendments to our tax and incentives laws. With the pandemic continuing to negatively impact the business landscape, it is hoped that these changes will support post-pandemic recovery while attracting more foreign investment into the country.
CREATE was drafted to improve the equity and efficiency of the corporate tax system by lowering the tax rate, widening the tax base, reducing tax distortions and leakages, and developing a more responsive and globally-competitive tax incentives regime that is performance-based, targeted, time-bound, and transparent.”
Revenue issuances issued by the BIR
https://www.bir.gov.ph/index.php/create.html
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Package 2+: Sin Taxes
Status
Effective (except “ The General Tax Amnesty”)
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Supporting documents
Republic Act No. 11346 (Tobacco Tax Law of 2019)
Republic Act No. 11467 on alcoholic beverages and e-cigarettes (with Veto Message)
Signed into law
Republic Act No. 11346 - July 25, 2019
Republic Act No. 11467 - January 22, 2020
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Date of publication
Republic Act No. 11346 - July 26, 2019
Republic Act No. 11467 - January 23, 2020
Effective date
Republic Act No. 11346 - January 1, 2020
Republic Act No. 11467 - January 1, 2020
“Tax Reform Package 2+ (Sin Taxes) increased taxes on tobacco, alcohol, and e-cigarette products to provide funds to the universal health care and to reduce health risks associated with consumption of these “sin” products”.