ATTY.

LUMBERA NIRCvTRAIN 1
MATTERS FOR DISCUSSION: • HB 5636 ( Improved Income tax, Estate Tax, Donor’s
1. Briefer on SB 1906 Tax, VAT, Excise Tax on Petroleum and Automobiles)
(TRAIN 2 by Sen Sotto) • SB 1592 (Income tax, Estate Tax, Donor’s Tax, VAT,
2. TRAIN LAW (signed by PRRD 19 Dec 2017 with veto Excise Tax on Petroleum and Automobiles, Nov. 27,
provisions) 2017)
3. BIR Issuances • TRAIN LAW (signed by PRRD 19 Dec 2017 with veto
4. Amnesty provisions)

BACKGROUND ON PHILIPPINE TAX RATES RELEVANT BIR ISSUANCES:

• RR 8-20018: INCOME TAX
TAX RATES IN ASEAN • RR 11-2018: W/HOLDING TAX SYSTEM
• RR 12-2018: ESTATE/DONOR’S TAX
• RR 13-2018:VAT

BRIEFER: TRAIN 2; SB 1906 03 Aug 2018

• Reduce corporate income tax from 30% to 25%;
• 654 firms enjoying incentives from the government;
• Tax incentive system that is performance-based, TRAIN LAW
targeted, transparent and time-bound in order to ensure (Republic Act No. 10963)
that the Filipino people will gain from every peso that the Signed by PRRD: 19 December 2017
government gives to the firms registered in the With Veto Provisions
investment promotion agencies;
• No inflationary effects but it will provide support to some RATIONALE:
90,000 plus SMSEs (small, and medium-sized “The benefits to be derived from this tax reform measure will
enterprises); sustainably finance the Government’s envisioned massive
• Repealing 123 special laws on investment tax investments in infrastructure thereby encouraging economic
incentives and consolidate into a single omnibus activity and job creation, as well as fund the desired increase in
incentive; the public budget for health, education and social programs
to alleviate poverty.”
REPEAL OF THE EXEMPTIONS:
a. GOCCs; “To sustainably finance these massive investments in
b. Proprietary educational institutions (PEIs); infrastructure and in the people, tax policy reform will be crucial
c. Proprietary Hospitals (PH); alongside tax administration and budget reforms.”
d. Regional or area headquarters (RHQs); “The tax reform bill seeks to achieve a simpler, fairer, and more
e. Regional operating headquarters (ROHQs); efficient tax system characterized by lower rates and a broader
f. Income of RFC from foreign currency transactions; base, to encourage investment, job creation, and poverty
g. Non-resident cinematographic film owner; reduction,”
h. Lessor or distributor and owner or lessor of vessels,
aircraft, machineries and other equipment. “The TRAIN bill is expected to help reduce poverty rate from 21.6
percent in 2015 to 14 percent in 2022, lifting some six million
BACKGROUND: TRAIN 1 Filipinos out of poverty, and helping the country achieve upper
• Sept 2016: DOF submitted to Lower House its original middle-income country status where per capita gross national
TRAIN proposal which was later modified and income increases from $3,500 in 2015 to at least $4,100 by
introduced in the chamber by Quirino Rep. Dakila Carlo 2022.”
Cua as HB 4774 and later consolidated with other tax
reform-related measures as HB 5636;
• May 2017: House version (HB 5636) was finally A. INCOME TAX (IT)
approved; *Revenue Regulation 8-2018 dated 25 Jan 2018 signed by
• 27 Nov 2017: Senate approved SB 1592 with DOF Sec on 15 Feb 2018
substantial amendments;
• HB, SB, TRAIN LAW (Sept 2016 to Dec 2017)
• HB 4814 ( Amnesty for Estate Tax) Sept 2016
• HB 4815 ( Simplifying Estate Tax)
• HB 4774 ( Amending Income tax, Estate Tax, Donor’s
Tax, VAT, Excise Tax on Petroleum and Automobiles)
ATTY. LUMBERA NIRCvTRAIN 2

NIT Rates (NIRC) (applicable to all INDIVIDUAL TAX

PAYERS [IND TXs]) (1) COMPENSATION INCOME EARNER (CIE):
- Employer-Employee Relationship;
- Minimum Wage Earners (MWE);
Taxable Income:

Net Income Tax (NIT) Table (TRAIN) (1) CIE:

• For married individuals: H and W computes separately
their individual income tax based on respective income.
If cannot be definitely attributed to or identified as income
exclusively earned by either spouse, income shall be
divided equally between spouses;
• MWE: exempted from tax for the minimum wage and
OT, HP, HP, NSD shall still be exempt from tax;
• NIT rates apply;
• P250,000.00 exemption applies;
• Personal Exemption (PE), Additional Exemption (AE),
PHHI removed (the removal applies to all IND TX).

ü NIRC: 2,038,202 MWE are not subject to tax;

ü After TRAIN: 3,987,509 MWE and other TXs
will no longer pay income tax;

IND TXS (3):

1. Compensation Income Earner (CIE);
- Employer-Employee Relationship;
- Minimum Wage Earners;
2. Self Employed (SEI/SEP);
- Business;
- Exercise of Profession;
- Business + Profession;
3. Mixed Income Earners (MIE)
- Compensation + Business;
- Compensation + Profession;
- Compensation + Business + Profession
ATTY. LUMBERA NIRCvTRAIN 3
For MWE: • If TX elected 8% and GR/GS is conclusively not
• TRAIN LAW: no cash effect on MWE; exceeding P3M at the end of the year, 8% is based on
• NIRC and TRAIN: MWEs exempted from income tax; actual GR/GS plus non-operating income;
• No additional cash received by MWE every month; o No requirement to attach AFS to the Annual
• Full Impact of increase in prices of consumer goods ITR;
and services;
• If TX initially elected 8% and GR/GS plus non-operating
(2) SEIs/SEPs: income exceed P3M during the year, NIT rates shall
• “Self-employed” – a sole proprietor or an independent be automatically applied and TX shall be allowed tax
contractor who reports income earned from self credit for the previous quarters’ income tax payments
employment. S/he controls who s/he works, how the under the 8%;
work is done and when it is done. It includes those hired o AFS shall be required;
under a contract of service or job order, and o TX shall be subject to business taxes;
professionals whose income is derived purely from the
practice of profession and not under an employer- ex.
employee relationship (Sec. 2(n), Rev. Regs. 8-2018)
• “Professional” – a person formally certified by a
professional body belonging to a specific profession by
virtue of having completed a required examination or
course of studies and/or practice, whose competence
can usually be measured against an established set of
standards. It also refers to a person who engages in
some art or sport for money, as a means of livelihood,
rather than as a hobby (Sec. 2(n), Rev. Regs. 8-2018)
• Doctors, lawyers, engineers, architects, CPAs,
professional entertainers, artists, professional athletes,
directors, producers, insurance agents, insurance
adjusters, management and technical consultants,
bookkeeping agents, and other recipients of
professional, promotional, and talent fees. (Sec. 2(n),
Rev. Regs. 8-2018)
o (no other income except being self-employed
or practice of profession)

If gross receipts (GR)/ gross sales (GS) do not

exceed P 3 million
o Option 1:
8% tax on GR/GS and other non-
operating income in excess of P
250,000.00 (NO % TAX; NO VAT)
o Option 2:
NIT rates + % tax (NO VAT)
If GR/GS exceed P 3 million:
o NIT rates plus VAT

• SEI/SEP must signify intention to elect the 8% tax in

the 1st Quarter Percentage and/or Income Tax Return,
otherwise the TP shall be considered as having availed
of the 20%-35% graduated income tax rates and the 3%
percentage tax;
• Deadline: 30 April 2018 (original deadline 30 Mar 2018)

Optional 8% tax is not available to:

• A VAT-registered taxpayer regardless of amount of
GR/GS, and to a Tax Payer (TX) who is subject to other
% Taxes, except those subject to the 3% percentage tax
under Sec. 116.
• Partners of a GPP by virtue of their distributive share
from the GPP which is already net of costs and expenses

• P250,000.00 deduction is applied;

• TX should elect to avail of 8% tax in the Q1 percentage
or income tax return (ITR) or on the initial quarter return,
otherwise, TX considered to have availed of the NIT
rates.
• Election is irrevocable and no amendment of option
shall be made for the said taxable year;
• Option 1 is not available to VAT-registered TX, (3) Mixed Income Earners (MIE): (compensation income +
regardless of amount of GR/GS AND to TX who is business or exercise of profession)
subject to other percentage taxes; Segmentized Computation:
ATTY. LUMBERA NIRCvTRAIN 4
a. Compensation Income: NIT rates • PCSO and Lotto winnings: P10,000.00 or less: NIT rates
b. Income from Business/Profession: More than P10,000.00: 20%
o If GR/GS do not exceed P 3M: NIT rates OR 8% • Cash and Property Dividends: 10%
tax on GR/GS and other non-operating income in • CGT from sale of shares of stocks (sale of sos):
excess of P250,000.00 (no % Tax; no VAT) increased to 15%
o If GR/GS exceed P 3M: NIT rates + VAT • CGT from sale of real property (sale of RP): retained at
6%
• P250,000.00 exemption is not available to mixed income
earners (available only to purely self-employed and PASSIVE INCOME OF NRAETB/ NRANETB: (B)
professional) since this is incorporated already in the first
tier of the NIT rates; • NRAETB: same treatment as RC for all income derived
• Total tax due is sum of tax due on compensation and from PH;
tax due on business/profession; • NRANETB: 25% on all income derived from PH
• If TX opted to be taxed under NIT rates for the income o Employees of Regional or Area HQs: removed
from business or profession, then both income shall be preferential tax treatment of 15% and now
computed together which will constitute the taxable subject to NIT rates; (part of the vetoed provisions
income; no need to segmentize; by PRRD);

ü BIR Tax Advisory: SEIs and SEPs who are ü NOTE THAT EXISTING REGIONAL, AREA HQs
VAT-registered TPs and whose gross and employees continue to enjoy preferential tax
sales/receipts and other non-operating income rate of 15% but for companies registered after
do not exceed P3 million in the preceding year, Jan. 1 2018, no more preferential tax treatment;
may elect to change his status from VAT to
non-VAT by filing the duly accomplished BIR NOT DISCUSSED:
Form 1905 on or before March 31, 2018; GOCCs:
ü Deadline extended to 30 April 2018; • All GOCCs shall be subject to tax except GSIS, SSS,
PHIC, Local Water Districts;
ex: • PCSO is removed as an exempt GOCC;
• TP earned annual compensation in 2018 of P1.5M
inclusive of 13th month pay and other benefits of EXCLUSIONS from GROSS INCOME (GI):
P120,000. Aside from compensation income, he owns a • 13TH month pay and other benefits: increased to
convenience store with gross sales of P2.4M. His cost of P90,000.00 from P 82,000;
sales and operating expenses are P1M and P600,000,
respectively, and with non-operating income of FRINGE BENEFITS:
P100,000. • 35% of the grossed-up monetary value payable by the
employer under the withholding tax system; increased
from 32% to 35%;
• Divisor is now 65%;
• If employee is NRANETB (OBUs, MNCs, OPSCs),
divisor is 75% and the FBT rate is 25%

DEDUCTIONS FROM GI
(SEI/SEP/MIE only) IF NIT RATES ARE APPLIED:
• Optional Standard Deduction (OSD) of 40% OR
Itemized deductions (ID), at the option of TX;
o If individual, 40% of GR/GS;
o If corporation, 40% of GI;
• OSD not applicable to individuals earning purely
compensation income;
• OSD not applicable if individual opted to be taxed at 8%
for their income from business/profession;
• If TX does not signify OSD, then ID applies;

DEDUCTIONS FROM GI (INDIVIDUAL TX):

• If TX elects OSD, election is irrevocable during the
taxable year;
• If TX elects OSD, no need to submit AFS;
• PE ( P 50,000.00) and AE ( P 25,000.00 per dependent)
REMOVED;
• Premiums on health and hospitalization insurance ( P
2,400.00) REMOVED;
PASSIVE INCOME OF IND TXs: (B) • Personal Exemption/deduction from gross income of
• Interest on any currency bank deposit: same at 20% estates and trust of P 20,000.00: REMOVED
• Interest income from depositary bank under expanded
foreign currency deposit system: 15% GENERAL PROFESSIONAL PARTNERSHIP (GPP)
• Long term deposits: 5%, 12%, 20% depending on • GPP is tax exempt as it is only acting as a “passthrough”
remaining maturity of investment; entity where its income is ultimately taxed to the partners
• Royalties: 20%; literary and musical compositions at comprising it;
10% • Net income of GPP is computed similar to a corporation;
• Prizes: P10,000.00 or less: NIT rates • GPP may claim OSD or ID;
More than P10,000.00: 20%
ATTY. LUMBERA NIRCvTRAIN 5
• If GPP opted to claim OSD, individual partners can no
longer claim OSD or any ID in their individual ESTATE TAX:
computation of tax; TRAIN: 6% of net estate
• Partners are not allowed to avail of the 8% income tax NIRC: 5% to 20%; if net estate not more than P 200,000.00
rate option since their distributive share from GPP is (EXEMPT)
already net of cost and expenses;
• If partner also derives income from trade, business, or NOT DISCUSSED:
practice of profession apart from being a partner in the
GPP, TX can claim deductions from such other
income;
INDIVIDUALS NOT REQUIRED TO FILE ITR:
• Purely compensation income earners whose taxable
income do not exceed P 250,000.00; Cert of WT filed
by employers duly stamped received by BIR is
tantamount to substituted filing of ITR;
• Individuals whose income has been subjected in full to
WT or FWT;
• MWE;
• Individuals earning purely compensation income from 2
or more employers, regardless of amount, must file
ITRs.

DUE DATE FOR FILING OF RETURNS:

• If engaged in business, practice of profession regardless
of amount of GR/GS:
QRs: May 15 for Q1, August 15 for Q2, and
Nov 15 Q3
ARs:15th day of the 4th month after close of CY
or 15 April
• Installment Payment for Individuals
If tax due is in excess of P 2,000.00: 1st
installment (50%) due at the time of filing of AR
and 50% on or before 15 Oct following the close
of the CY;
• ITR: maximum of 4 pages in paper form or electronic
form containing the ff information:
a) personal profile and info;
b) total GS,GR or income, except income subject
to final tax;
c) allowable deductions;
d) taxable income;
e) Income tax due and payable;
• FWT and EWT returns shall be filed and the payment
made not later than the last day of the month following
the close of the quarter during which the withholding
was made; (NIRC provides for 10th day the following
month)
• The provision that the Commissioner may require the
payment of the taxes withheld at more frequent intervals
is removed.

WITHHOLDING TAXES:
• Beginning January 1, 2019: the rate of WT shall be not
less than one percent (1%) but not more than fifteen
percent (15%);
• Applicable EWT rate on income payments to self-
employed individuals/ professionals is 5% and 10% now.

RMC 54-2018 ( 21 June 2018)

• Imposition of surcharge, interest, and compromise
penalty for filing an amended return;
• Where an additional tax is due, 25% penalty and 12%
interest shall be imposed per amended return based on
the additional tax to be paid;
• Compromise penalty for settlement of criminal liability for
violation of Tax Code: consensual in nature and • NEW: that if gross value of estate exceeds P5M (NIRC
cannot be imposed/exacted on TX. If TX refuses to requirement is P2M), return should be supported by
pay, violation shall be referred for appropriate statement duly certified by a certified public accountant;
criminal action; o NEW: Due Date of Filing of Return: Within one (1)
year from date of death;
DISCUSSED:
ATTY. LUMBERA NIRCvTRAIN 6
• NEW: In bank deposits where depositor died (alone or
jointly with others), if the Bank has knowledge of death,
it shall allow any withdrawal from the account subject
to a final withholding tax of 6%. Withdrawal slip shall
contain statement under oath that all of the joint
depositors are still living at the time of withdrawal;
o Amount withdrawn and subjected to 6% tax is
excluded from gross estate;

RMC 62-2018 ( 28 June 2018)

• Withdrawal is allowed within 1 year from death;
• For joint account, FWT of 6% based on the share of the
decedent joint depositor;
• Prior to withdrawal, bank requires the E’or/A’or, or any
legal heir withdrawing from the account, to present
copy of TIN of the ESTATE OF DECEASED, BIR Form
1904 of the estate stamped received by BIR;
• Bank issues BIR Form 2306 certifying the WT of 6%
tax, files the QR on the final tax, and remits to BIR;
• Withdrawal slips provide statement by any of the
surviving joint depositors that all other joint depositors
are still living and that withdrawal is subject to 6%
FWT;
• Bank deposits already declared as part of GE and
included in the E-CAR, NOT SUBJECT TO 6%;
• Banks may provide for documentation requirements
to ascertain identity and right of claim prior to
withdrawal;
• Requirement for filing of notice of death ( NIRC: 2
months from death) is REMOVED.
• Extension to file estate tax return: CIR on meritorious
grounds; not exceeding 30 days;
• Payment of estate tax: maybe extended by CIR if
payment would impose undue hardship to estate/heirs;
• EXTENSION for payment not to exceed 5 yrs ( judicial *500K-1M: Most usual amount of donation.
settlement) or 2 yrs (extra-judicial settlement);
• If with negligence, intentional disregard of rules, or fraud: VALUE ADDED TAX
no extension to file/pay; still at 12%
• NEW: In case available cash of the estate is insufficient
to pay estate tax due, payment by installment is allowed NOT DISCUSSED:
within two (2) years from statutory date of payment 0% (Sale of Goods)
without penalty and interest;

INSTALLMENT PAYMENT DUE TO INSUFFICIENCY OF

CASH:
• 2 yrs from date of filing of return provided that return is
filed within 1 yr from death;
• Frequency, due dates, and amount should be
indicated in the return subject to approval by CIR;
• After lapse of 2 yrs and tax not paid in full (but with partial
payments) remaining balance is due and demandable
subject to penalties and interest from original date of
filing of return (1 yr from death)

DISCUSSED:
DONOR’S TAX
• TRAIN LAW: 6% of total gifts in excess of P250,000.00
exempt gift;
• NIRC: 2% to 15% (not a stranger) and 30% (stranger);
• NIRC: if net gift is not more than P100,000.00, no
donor’s tax
o Distinction between strangers and not-strangers
REMOVED;
o Contributions for campaign purposes: RETAINED
• In case of transfer of insufficient consideration under
Section 100: bona fide sale (at arm’s length and free
from donative intent) of property in the ordinary course
of trade or business will be considered as made for
adequate and full consideration, thus, no donor’s tax;
ATTY. LUMBERA NIRCvTRAIN 7

• VIP NOTE: SECTION 112: period of granting of refund

reduced from 120 days to 90 days from date of
submission of complete documents in support of
application for refund of excess input VAT in zero rated
transactions;
• 2:120:30 (NIRC) v. 2:90:30 (TRAIN LAW)
• Should the CIR find that the grant of refund is not proper,
the Commissioner must state in writing the legal and
factual basis of denial;
• The “deemed denial” for failure of BIR to act on
application for refund is REMOVED;
• Additional proviso: Failure on the part of any official,
agent, or employee of the BIR to act on the application
within the ninety (90)-day period shall be punishable
under Section 269 of the Tax Code (administrative fine
and imprisonment).

FILING OF VAT RETURNS:

• NIRC: VAT taxpayers shall file quarterly returns within
25 days following the close of each taxable quarter,
while payment of the VAT shall be made on a monthly
basis upon filing of monthly VAT declaration.
• TRAIN LAW: Beginning January 1, 2023, the filing and
payment shall be done within 25 days following the
close of each taxable quarter.

OTHER PERCENTAGE TAXES:

• VETOED BY PRRD: Beginning January 1, 2019, self-
employed and professionals with total annual gross
sales and/or gross receipts not exceeding ₱500,000
shall be exempt from the 3% gross receipts tax.
• SECTION 127: STOCK TRANSACTION TAX
NIRC: 1⁄2 of 1% of GSP/GV
TRAIN LAW: increased to 6/10 of 1%.

DISCUSSED:
EXCISE TAX (SIN TAX)
1. Cigarettes;
2. Fuel;
3. Motor Vehicles;
4. Sweetened Beverages;
5. Non-Essential Service; and
6. Coal and Mineral Products;
ATTY. LUMBERA NIRCvTRAIN 8

I. CIGARETTES

Note on SENATE BILL: Up to 1M:10%; if more than 1M: 20%

II. FUEL

• NEW: Mandatory Marking of petroleum products: The

SOF shall require the use of an official fuel marking or
similar technology on petroleum products that are
refined, manufactured or imported into the Philippines,
and that are subject to the payment of taxes and duties;
• NEW: Absence of official or dilution of the official marker
on petroleum products shall raise the presumption that
the products were withdrawn with the intention to evade
the payment of the taxes and duties thereon.
• The use of fraudulent marker on the petroleum products
shall be considered prima facie evidence that the same
have been withdrawn or imported without the payment
of taxes and duties due thereon.
IV. NON-ESSENTIAL SERVICES/ COSMETICS:
III. AUTOMOBILES
• 5% (from 20% to 10% to 5%) on gross sales or receipts
• Hybrid vehicles shall be subject to 50% of the applicable
derived from service): original proposal in Senate is at
taxes;
20%;
• Purely electric vehicles and pickups shall be exempt
• During deliberations, RECTO and ANGARA
from excise tax on automobiles;
proposed to remove but objected to by DRILON;
Final version is at 10% at the Senate but after
bicameral reduced to 5%;
• Invasive cosmetic procedures, surgeries, and body
enhancements for aesthetic reasons shall be subject to
5% excise tax based on the gross receipts derived from
the performance of services, net of excise tax and VAT.
Body enhancements shall refer to those:
ATTY. LUMBERA NIRCvTRAIN 9
• Directed solely towards improving, altering or enhancing • For corporation, association, or partnership: fine of triple
a patient’s appearance; the amount of deficiency taxes, surcharges, and interest;
• that do not meaningfully promote the function of the body • Criminal liability;
or prevent or treat illness or disease. • For non-resident: immediate deportation after serving
sentence

The tax shall not apply to nor cover:

• Procedures necessary to ameliorate a deformity arising VI. COAL AND MINERAL PRODUCTS:
from, or directly related to:
o a congenital or developmental defect or abnormality
o a personal injury resulting from an accident or
trauma
o a disfiguring disease, tumor, virus or infection;
• Cases or treatments covered by the National Health
Insurance Program;

V. SWEETEND BEVERAGES

NOTES:
• Manufacturers of articles subject to excise tax shall
provide themselves with counting or metering devices to
determine as accurately as possible the volume,
quantity, or number of the articles produced, to be
complied with before commencement of operations.
• NEW: Importers are likewise required to provide
themselves with such Bureau-accredited counting or
metering devices to determine volume, quantity or
number of articles imported.
Sweetened beverages –
o non- alcoholic beverages of any constitution (liquid, DOCUMENTARY STAMP TAX:
powder, or concentrates) pre-packaged and sealed • RATES ARE DOUBLED (100% increase except for some
according to FDA standards, containing caloric and/or documents: loan documents at 50% and for real property
non-caloric sweeteners added by the manufacturer; retained at 1.5%)
List of sweetened beverages (not exclusive):
ü Sweetened juice drinks NOT DISCUSSED:
ü Sweetened tea Administrative Provisions:
ü All carbonated beverages • Those whose gross annual sales, earnings, receipts or
ü Flavored water output exceed ₱ 3M shall have their books of accounts
ü Energy and sports drink audited and examined yearly by independent CPAs and
ü Other powdered drinks not classified as milk, juice, their ITRs accompanied with a duly accomplished AIF.
tea, and coffee • The Commissioner shall simplify the business
ü Cereal and grain beverages registration and tax compliance requirements of self-
ü Other non-alcoholic beverages that contain added employed individuals and/or professionals.
sugar • Threshold amount is increased to ₱ 3M FOR VAT
EXCLUDED PRODUCTS: REGISTRATION;
ü All milk products, including plain milk, infant formula • Any taxable individual who elects to pay the 8% tax on
milk, follow-on milk, and growing up milk, powdered gross sales or receipts shall not be allowed to avail of
milk, ready to drink milk and flavored milk, optional VAT registration;
fermented milk, soymilk, and flavored soymilk • It is expressly provided that the issuance of the receipt
ü 100% natural fruit juices or invoice shall be made at the point of sale. The
ü 100% natural vegetable juices threshold amount is increased to ₱100.00 FROM P
ü Meal replacement and medically indicated 25.00;
beverages • General interest on unpaid amount of tax is reduced to
ü Ground coffee, instant soluble coffee, and pre- 12% FROM 20% (at double the rate of legal interest rate
packaged powdered coffee products (with or for loans or forbearance of any money in the absence of
without added sugar) an express stipulation as set by the BSP; prevailing
BSP-set legal interest is 6%)
Penalties and fines for misrepresentation or misdeclaration • Deficiency and delinquency interest shall in no case
in the required Manufacturer’s or Producer’s Sworn be imposed simultaneously.
Statement • The period when deficiency interest shall stop to run is
• Summary cancellation or withdrawal of the permit to until full payment OR upon issuance of a notice and
engage in business as manufacturer or importer of demand by the BIR Commissioner, whichever comes
sweetened beverages; earlier. Under the NIRC, Deficiency interest is assessed
ATTY. LUMBERA NIRCvTRAIN 10
and collected from the date prescribed for its payment • DOF sponsored proposals
until full payment thereof. • Target Implementation: April 2019
• Attempt to evade or defeat tax: Administrative Fine is
increased to not less than ₱500,000 but not more than I. Estate tax
₱10,000,000; • Deaths prior to 01 Jan 2018;
• Imprisonment is increased to not less than 6 years but • Estate tax amnesty;
not more than 10 years ( NIRC: not less than ₱30,000 • 6% of the net undeclared estate tax;
but not more than ₱100,000 and suffer imprisonment of II. General Tax Amnesty on all unpaid internal revenue
not less than 2 years but not not more than 4 years) taxes excluding those arising from importation and TCD;
• Additional punishable offense: Printing of other
fraudulent receipts or sales or commercial invoices; III. Tax deliquencies
• NEW: Failure to Transmit Sales Data Entered on Cash 50% of basic tax excluding interest, surcharges;
Register Machine/POS Machines to the BIR’s Electronic 80% of basic tax if criminal case is pending in court;
Sales Reporting System:
For each day of violation: 1/10 of 1% of the annual net
income as reflected in the Audited FS for the second year
preceding the current taxable year OR ₱10,000, whichever
is higher.
• *IF the aggregate number of days of violation exceed
180 days within a taxable year, additional penalty shall
be: permanent closure of the Taxpayer;
• The penalty shall not apply if the failure to transmit is due
to force majeure or any causes beyond the control of the
taxpayer

DISCUSSED:
ALLOCATION OF INCREMENTAL REVENUES:
• Revenues from TRAIN: Earmarking of the yearly
incremental revenues for five (5) years for infrastructure
programs of the government and other projects of the
government on a 70-30 ratio;
o 70%: Build Build Build/Infrastructure for mass
transport, new road networks, military infra, sports
facilities for public schools, and potable drinking
water supply in public places;
o 30%:
§ projects to advance self reliance of
farmers in sugar industry;
§ Self-mitigating measures and
investments in education, health, social
protection, employment, housing priority
for the poor and near-poor households;
§ Other social benefits programs of the
government;
§ Social welfare and benefits programs to
qualified social benefits cardholders in
addition to any other discount:
1) unconditional cash transfer of P
200/mo;
2) fuel vouchers to qualified franchise
holders of PUJs)
3) For MWEs/unemployed and the
poorest 50% of population ( fare
discount, NFA discount, TESDA
skills training)

Facts: 5 months of TRAIN

• Prices of Basic goods and services: Increase of 4.6%
• Inflation rate: 5.2 % from BSP estimate of 2% to 4%;
fastest inflation rate increase for the last 5 yrs; Attributed
to higher fuel costs in int’l market and higher taxes
• 1 USD: P 53.42 as of July 05, 2018;
1 USD: P 53.55 June 29, 2006;
• Move to activate and facilitate the social welfare
provisions of TRAIN Law; 3Q fully distributed;
• Cash Transfer of P 200.00/person: 3Q 2018 fully
distributed to 10 M Filipinos;
• Move to suspend TRAIN LAW for fuel and coal;

TAX AMNESTY
As of July 5, 2018: