The Tax Reform for Acceleration and Inclusion (TRAIN) Law or the Republic Act No. 10963, signed by President Rodrigo Duterte on 19 December 2017, has been effected last 1 January 2018. The TRAIN law superseded the outdated National Internal Revenue Code (NIRC) or the Tax Reform Act of 1997.
The TRAIN law specifically exempts from income tax those earning less than Php250,000 a year or Php21,000 monthly, while other income brackets significantly make their take home pay a notch higher because of the tax decrease. (See table 1).
The law also simplifies the estate and donors tax, expands the value added tax (VAT) base, raises from zero to five percent tax on medical procedures/beauty enhancements, and increases the excise tax of petroleum products, automobiles, and sugar-sweetened beverages.
There are other provisions stated in the TRAIN law, but one thing is certain: everyone will be affected, the SMEs included. SMEs will have to shell out increased budget on their transportation since gas and petroleum prices will have significant increases. With the expected increase in the various services and logistics, small entrepreneurs will have to innovate ways on how to expand their businesses without having to add on higher expenses to their customers. There will be so much changes on how SMEs will have to deal with businesses. They should find creative instances to make their small endeavors more palatable to their respective customers to stay afloat to today’s business scenario.
ISSI partners with various sectors, the SME most importantly, to attain the inclusive growth promoted by the government, and to withstand the aftershocks of the TRAIN law. Our “principal objective then as now was to assist and promote the development and growth of the small scale industrial sector in the Philippines” through training, research and extension services.
To be intelligently informed about the current trends and issues concerning SMEs, including TRAIN law, and develop accounting, entrepreneurial, and supervisory and managerial competencies, UP ISSI is proudly offering our training programs slated this 27 January 2018. (See table 2).
UP ISSI is also giving you this one-day conference titled: MSME and Nation-Building. This will be held this coming 16 March 2018 at the UP Bonifacio Global City. You may look for added details at www.msmefrontier.upd.edu.ph.