Abstract:
Taxation is a constitutional power and absolute prerogative of the State. However, the 1987 Philippine Constitution ensures and limits the Government’s power to tax. Article VI, Section 8 of the Philippine Constitution states that it is the responsibility of the Congress to enact and enforce a progressive, uniform, and equitable system of taxation. With this, anything that will result from the taxation system is under the accountability of the Government. The Philippine taxation system has faced numerous difficulties and problems, as a response, the Duterte Administration pursued a comprehensive tax reform, titled “Tax Reform for Acceleration and Inclusion” (TRAIN). It introduced and implemented new taxes and several changes on the Internal Revenue Code of 1997 last January 2018. In addition, the raised revenue would fund the government priorities’ social welfare and infrastructure projects. Many criticize and oppose the implementation of the TRAIN Law Package 1 as they deemed it to be anti-poor. This paper will focus on the impact of the TRAIN Law Package 1 on the low income and middle income families of Barangay Cembo, Makati City. However, it will only center on the effects in the change of personal income taxation, excise tax on petroleum products, and sugar-sweetened beverages on the financial aspect of both low and middle income families. In order to gain more knowledge and accurate impact of the TRAIN 1, the study had use of secondary data, and in-depth interviews with several low income and middle income families in Barangay Cembo, Makati City. The study concluded that the TRAIN 1 did not improve the quality of lives specifically on the financial aspects of the residents in the said barangay. Therefore, the study recommends that the government should devise a tax and social service system that would let people gain more benefit than the cost of taxation.
