The TRAIN Law and How It Affects Estate Taxes
Tax is a very crucial and sensitive topic in the Philippines. Many people have been caught into trouble against the government because of issues involving taxes. Every country is partly being run by taxes from its people and it is where the development of each nation relies on. That is why it is the duty of the government to improve the taxing system that it will apply to the people.
Through the years, the Philippines also cannot deny the fact that it struggled when it comes to the issue of tax. It is influenced by a lot of different factors such as corruption, inflation and many others. That is why the people are demanding and expecting a lot to the government when it comes to reforms in their administration and management of taxes.
Many industries such as the agriculture and estate also deal with massive amount of tax. These things which involves land ownership and infrastructure building is being closely and strictly monitored by the authorities. Many tax reforms and laws are being concentrated on these aspects.
An example of a law that has just been recently passed and implemented is the TRAIN law. This new law just imposes a single, flat rate of six percent, applied to the net value of the inheritance. It also collapsed the various allowable deductions into a single standard deduction which is higher than the previous amount. Similarly, the threshold value of the family home, above which will be added to the net estate, was increased by 10%
Many government planners now hope that by imposing lower tax rates, compliance with the law can be improved. Laws like TRAIN garnered a mixture of reactions along which some are negative because of the effect that it gives to the Filipino consumers. The outrage that it has brought will continuously grow as long as the people feel the burden of being taxed. But this is just the start because there are more laws like TRAIN that are about to be implemented by this administration.
On the other hand, the government is positive with its vision that most salaried workers will now receive higher take-home pay due to lower tax rates which started last year. However, the new law also raised duties on fuel, cars and sugar-sweetened drinks, among others. While to help the people determine the numerical effects of TRAIN law, Department of Finance has released a calculator to compute effects of tax reform, including higher commodity prices and the government’s planned cash transfers for the poor.
Many presidents have passed, yet no one have succeeded to implement the best working taxation reform that will benefit the Filipino people and will finally alleviate our economic standing. Lack of focus on this aspect is one of the leading causes of their inability to solve this major problem while some speculate that this problem with the taxation in the Philippines is impossible to be solved by only one administration no matter how hard they work to solve it. Guess nothing but time can tell whether this Asian country still stand a chance and if it still has hope in getting out of its tax-related crisis.