Question & AnswerQ&A (Republic Act No. 10963)
Republic Act No. 10963 is officially titled the Tax Reform for Acceleration and Inclusion (TRAIN).
The policy includes enhancing tax progressivity, providing equitable relief to taxpayers to increase disposable income, and ensuring government provision for infrastructure, health, education, jobs, and social protection.
The Commissioner can obtain information regularly from any person or government entity about taxpayer details such as costs, sales, incomes, including financial statements, to ascertain tax correctness.
Tax rates start at 0% for income up to P250,000, 15% for income over P250,000 but up to P400,000, scaling up progressively with the highest rate of 35% for income over P8,000,000.
An individual whose taxable income does not exceed P250,000 is exempt from filing an income tax return.
A final tax of 35% is imposed on fringe benefits furnished to employees except rank and file.
The excise tax rate is forty pesos (P40.00) per pack.
It mandates the use of official fuel markers on petroleum products to ensure tax payment and to prevent tax evasion through unmarked or diluted fuel.
The taxpayer faces a daily penalty of 1/10 of 1% of their annual net income or P10,000 per day, with additional penalty of permanent closure if violation exceeds 180 days.
Up to 70% of incremental revenues fund infrastructure projects, and up to 30% fund programs for sugar industry development, social mitigating measures, and social benefits.
Examples include importation of professional instruments, educational services by accredited institutions, transport of passengers by international carriers, sale of certain real properties, and sales by agricultural cooperatives.
Taxable income means pertinent items of gross income less allowable deductions authorized under the NIRC or special laws.
Individuals subject to tax may elect a standard deduction not exceeding 40% of gross sales or gross receipts in lieu of itemized deductions.
The penalty includes a fine from P500,000 up to P10 million and imprisonment from six to ten years.