Complementary Measures

For 5 years, revenues generated from TRAIN will only be used for specific programs. Not more than 70% will be used to fund infrastructure projects, such as the Build, Build, Build program and other projects that address road congestion through mass transportation and the creation of road networks.

Part of the 70% will fund the upgrading of existing military infrastructure, the creation of sports facilities in public schools, and help increase access of potable water in all public places.

The remaining 30% of TRAIN revenue will be used for the targeted cash transfer (TCT) program as well as other programs that invest in education, health, employment, social protection, and housing.

Tax Administration

TRAIN also includes the following tax administration measures to complement reforms in tax policy:

• Mandatory fuel marking

• Provision for use of electronic receipts

• Connection of cash registers and point of sale machines to BIR servers for real time reporting of sales and purchase data

• Relaxation of bank secrecy laws and automatic exchange of information to allow for more effective prosecution of criminal cases

Indeed, tax administration agencies need to be modernized and major reforms are needed. While much is still needed to be done, BIR has been developing and continually improving its e-systems, such as eBIRForms, Electronic Filing and Payment System, and mobile payments, to provide better services to the public and to minimize human intervention in tax collection. BIR also commits to simplify tax forms and processes to encourage taxpayer compliance.

Ear marking

For 5 years, revenues generated from TRAIN are earmarked for specific programs. 70% will be used to fund infrastructure projects and 30% will fund social services. Infrastructure projects include, but not limited to:

• The Build, Build, Build program and other projects that address road congestion through mass transportation and the creation of road networks.

• Fund the upgrading of existing military infrastructure

• The creation of sports facilities in public schools, and

• Potable water in all public places

Social programs

The social programs under TRAIN are the following:

• Programs for sugar farmers to increase productivity, provide livelihood opportunities, develop alternative farming systems, and enhance farmer’s income

• Social mitigating measures and investments in education, health, social protection, employment, and housing for poor and near-poor households

• Unconditional cash transfer to the poorest 10 million households

• Social benefits card to determine qualified beneficiaries (fuel vouchers for PUJs, fare discount for all public utility vehicles, discounted purchase of NFA rice, free skills training under TESDA)

Targeted Unconditional Cash Transfer

Explicitly included in TRAIN is a time-bound earmarking of some of the gains from fuel excise tax for targeted unconditional cash transfers (TUCT) to provide immediate and sufficient relief to poor families and help them adjust smoothly to the temporary shock introduced by the new tax regime. The fund will come from a portion of the incremental revenues generated from oil excise tax.

The transfers aims to protect low-income households in the short term. This will be added on top of the current transfers being received by beneficiaries of the Conditional Cash Transfers program.

Under TCT, beneficiaries will receive 200 pesos a month on the first year of TRAIN implementation while 300 pesos a month will be given for the next two years.

A social welfare card will also be given to the poorest households to ensure proper targeting of future cash subsidies and other benefits provided by the national government such as discounts on medicine, transportation, rice, and vocational trainings.