what is the pros and cons of the train law of taxation?
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what is the pros and cons of the train law of taxation?
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Answer:
Pros and Cons of Train law of taxation
Explanation:
Pros and cons of TRAIN
Advocates and opponents of TRAIN point out the following potential benefits and negative impacts of the program:
Potential benefits:
• Higher take-home pay and therefore improved spending power, particularly for those earning P40,000 a month or less
• Better income rate after taxes for corporations
• More efficient tax collection
• Offsetting measures said to affect the most affluent businesses and individuals will generate income that will be used in the government’s aggressive infrastructure projects and in improving basic services, such as housing, education, and “social protection”
Potential negative impact:
• Inflationary effects of higher petroleum prices that are seen to mostly affect the bottom 60% of households. The government aims to offset these effects with a “transfer scheme” that will allocate around P30 billion from petroleum excise taxes to support the bottom sectors. This scheme has been criticized, however, for being unsustainable – projected to last only one to four years – and a “logistical nightmare.”
• Excise taxes on sugar-sweetened drinks will burden the bottom sectors, particularly those who are already tax exempt under the current taxation system, and therefore will not benefit from the lowered tax rates.
• Higher property taxes due to higher property valuation.
• Investors who are looking to benefit from PEZA (Philippine Economic Zone Authority) incentives may be discouraged by the removal or restructuring of some of these incentives.
• VAT on low-rental housing may lead to higher rental costs.
• For small businesses like sari-sari stores, being taxed on gross income rather than net income computed after expenses can mean higher tax payments.
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