Yes, under R.A. No. 10963, otherwise known as, “Tax Reform for Acceleration and Inclusion  (TRAIN)”, it totally repealed Section 35 of National Internal Revenue Code- the old tax law.


Section 12 of R.A. 10963 known as TRAIN or Tax Reform for Acceleration


Would that be an advantage or a disadvantage for us, individual taxpayers? Let us see.

Before, under Section 35 of the NIRC, each individual taxpayer is allowed a basic personal exemption amounting to Fifty Thousand Pesos (P50,000), and  additional exemption of Twenty-five thousand pesos (P25,000) for each dependent not exceeding four (4).

This means that from your Income after Deductions, you are still entitled to deduct a Personal Exemption of P50, 000.00 and Additional Exemption of 25,000.00 for each declared dependent.

So, for instance, if you have four (4) dependents, the maximum amount you can deduct, for purposes of computing your taxable income, is P100,000.00, aside from the P50, 000.00 personal exemption.

The obvious purpose of these exemptions is to ease the burden of earning individuals who have dependents as tax relief that reduces the amount of tax due to family expenses. The law recognizes the additional burden faced by individuals who have dependent/s living with him and relies upon him for chief support.

Under the old law, the term dependent means, “a legitimate, illegitimate or legally adopted child chiefly dependent upon and living with the taxpayer if such dependent is not more than twenty-one (21) years of age, unmarried and not gainfully employed or if such dependent, regardless of age, is incapable of self-support because of mental or physical defect.”

There is a real and substantial distinction between an individual taxpayer who has dependent and those who don’t. I believe no one will argue with me on that.

Now, under the TRAIN law, it completely disregarded said distinction as it puts every individual taxpayer on equal footing. Fair? No. It’s not.

Although, there is no dispute that the TRAIN law somehow reduces or totally eliminated the tax/taxes liability of every Filipino taxpayer, as the case maybe, to totally disregard the purpose of the former law in according the “additional exemption” for taxpayers who have dependents makes me uncomfortable. The TRAIN law somehow failed to provide a level playing field.

What do you think?