P250,000 tax exemption will shield the middle class from TRAIN tax hikes

By Rose de la Cruz

 

Exempting the first P250,000 of individual income from the TRAIN (tax reform for acceleration and inclusion) tax hikes and the resultant price increases will be the best shield for the middle class.

 

Thus said Rep. Michael “Mikee” Romero, 1 PACMAN partylist and assistant majority leader as he took note of the inflation forecast of the Development Budget Coordinating Council that factored in the impact of TRAIN. For 2018-2020 it is at 3 percent ± 1 percentage point. The Bangko Sentral of the Philippines inflation forecast is 3.4 percent.

 

He said “fear mongers” continue to paint the TRAIN Law as bad for Filipinos, when it is not. TRAIN is one of the most historic tax laws of the country that corrects the gross injustice of the old income tax system on the middle class and the poor since the 1990s.

 

The second TRAIN is coming soon, said Finance Secretary Sonny Dominguez. Romero said he looks forward to seeing the details of the second tax reform package and working with President Duterte’s economic advisers to arrive at the right mix for the people and the economy.

 

“When individual income taxpayers start receiving their salaries in January, the fear mongers’ protestations of gloom and doom will fall on deaf ears. When the poor get their tax reform cash transfer subsidies, the fear mongers will encounter deafer ears. When college students enroll in State universities and colleges, they would encounter deafer ears. Soon enough, the fear mongers will only have each other to talk with,” he said.

 

He offered some advice to salary earners, the self-employed and small-scale entrepreneurs on how their personal disposable income can be put to good use.

 

“Remember all those times before when you or your loved ones got sick or you needed cash for tuition and you wished you had some extra cash stashed away? Now would be the time to open an extra savings account to which you will transfer some or all of the extra cash because of TRAIN,” he said.

 

Another way to save for those emergencies is to purchase a pre-need medical plan for ER, diagnostic exams, and hospitalization.

 

Savings can also be used for buying assets that will earn additional net income for the family, but before embarking on that please compute all the costs, risks, and conservatively estimate for possible future income, he said.

 

 

The very last thing you should spend that extra cash on is impulse buying, purchasing out of want instead of need,  or any other expense that does not come with a future benefit. 

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