What hath TRAIN wrought?

deductions to those who need to file while lowering the taxes applicable to those who need to file. In addition, the law grants exemptions to the 13th month pay and other bonuses.

Then for small-scale businesses, the value- added tax ( VAT) threshold has been increased to P3 million. Included in the VAT exemptions are senior citizens and persons with disabilities ( PWDs). Certain medications, such as those for diabetes, cholesterol control and hypertension are also exempt. To promote the use of alternative and renewable energy sources, revenues from the sale of solar, wind and other forms of renewable energy are likewise exempt. Rentals up to P15,000 are likewise exempt from VAT.

Another benefit to taxpayers is that the estate and donor’s tax will be levied a flat rate of 6%. This is a reduction from the 20% regime for estates worth P200,000 and above. Furthermore, the TRAIN law increases the tax threshold to P5 million, whereupon the 6% rate will be applied for values above P5 million.

In the immediate future, the tax payment process will be simpler and the BIR will shorten and simplify the income tax return form.

Now comes the painful part.

To raise revenues, the TRAIN law will impose an excise tax on sugar- sweetened beverages and cigarettes. While cigarettes have always been part of tax revenue measures, soft drinks are now targeted ostensibly to reduce consumption, which further reduces sugar-induced obesity and diabetes. Bad news for our sugar planters. The tax is no joke — P6/ liter, and for high fructose corn syrup — P12/ liter. This may add about P3-10 more per bottle of your favorite carbonated drink.

Exempted from this are milk products, natural fruit and vegetable juices and ground, instant and pre-packaged coffee products.

Probably the most painful part for ordinary consumers like you and me is the increase in taxes on petroleum products. Regular and unleaded premium gasoline will be taxed at P7/ liter in 2018 rising to P10 in 2020. Diesel and kerosene will be taxed a minimum of P2.50/ liter rising to P6/ liter in 2020. LPG for household use will be taxed an additional P1/ kg rising to P3/ kg in 2020. If you are wondering why diesel prices spiked beginning this year, this is attributable in the main, to this law. In August 2017, diesel prices were about P29/ liter, while today diesel costs close to P45/ liter. The good news is that the tax is a form of rationing and inducing fuel economy by reducing trips and unnecessary use.