With the implementation of the Tax Reform for Acceleration and Inclusion Act (TRAIN) starting this January, non-minimum wage earners such as teachers, mall executives and car salespersons now enjoy an additional P4,000 to P6,000 increase in take-home pay per month, a cash bonanza they say they plan to set aside either to augment their bank deposits, invest in financial instruments, travel or spend on special occasions with their family members.

Under the TRAIN, non-minimum wage earners receiving P21,000 and below per month are exempted from paying the personal income tax (PIT), while those earning above this amount also get to enjoy substantial tax cuts. The 13th month pay and other bonuses not exceeding a total of P90,000 are also non-taxable under the TRAIN.

Finance Secretary Carlos Dominguez III said the enactment of the TRAIN paved the way for the substantial reduction in PIT rates for the first time in the country’s tax history.

Eileen Ramas, an operations manager at a mall in Quezon City, saw her pay slip last month reflecting a higher take home pay of P5,000 more as a result of this tax reform law.

“We have been waiting for this (law) because for the longest time medyo sobra-sobra talaga ‘yung — feeling ko talagang sobra-sobra ‘yung binabayad kong tax (it seems too much, my feeling is that I have been paying too much in terms of taxes). Previously, without the TRAIN Law, I was paying more or less—more pa pagka may holidays (even more when there are holidays)—about P15,000 a month just for my taxes. So ngayon, nasa P10,000 na lang (So now, it’s just about P10,000),” said Ramas during a recent interview at a public affairs radio program.

“So in a month, I save about P5,000,” added Ramas, who has been employed with the company managing the mall for more than 15 years now.

Ramas said the additional expenses she expects to incur as a result of the revenue-enhancing measures under the TRAIN, such as the adjustments in fuel excise taxes, can be managed so she still ends up with additional savings from her higher take-home pay.

“Meron akong maisusubi kahit papaano because ‘yung mga iba namang dinagdagan na gastos is actually by choice, hindi necessity. Like kung gasoline, may mga ibang options tayo eh than to just go and take your car whenever and wherever you want. I am a mother, I am a wife, so lagi akong naggo-grocery. Hindi ko pa siya nararamdaman ang epekto ng mataas na bilihin. Ang sa akin, talagang ang nararamdaman ko ‘yung help ng pagpasa ng TRAIN law (I still can save some money because the additional expenses you incur is actually by choice, not necessity. Like for gasoline, there are other options than just taking your car whenever and wherever you want. I am a mother, I am a wife, so I always go grocery shopping. I still haven’t felt the effect of higher prices. For me, what I am feeling now is the help I get from the passage of the TRAIN law),” she said.

Ramas said she has started saving the additional P5,000 she gets every month, which would amount to a hefty P60,000 per year, by placing it in a separate bank account to help realize her family’s travel plans.

In the public sector, Maleen Abuyen, who works at the House of Representatives, said her tax deductions before TRAIN amounted to P9,000 per month, which has since been reduced to only P4,000 following the implementation of the tax reform law.

“Tumaas talaga kasi sa government meron kami ‘yung SSL 3. So dahil sa Salary Standardization, tumaas ‘yung amingsalary. Pero kung kahit wala ‘yung SSL, tumaas ‘yung aming take-home dahil nabawasan ‘yung aming tax, withholding tax (We really saw an increase in our pay because in the government we have the Salary Standardization Law Tranche 3. So, because of the Salary Standardization, our salaries increased. But even without the SSL, our take-home pay rose because the tax was reduced, our withholding tax),” said Abuyen during the radio program.

Abuyen said some of her co-workers told her they saw their monthly pay rise because they now pay zero income tax.

She said with their higher take home pay, which means a higher capacity to pay, they can now apply for higher loan amounts at their employees’ cooperative.

Like Ramas, Abuyen said she plans to save her additional take-home pay for her family’s travel plans and also for the celebration she is planning for her child’s upcoming graduation.

In the same radio program, Ruth Orolio, a senior sales consultant at a car dealership, said she was previously taxed 32 percent of the earnings she gets from commissions and incentives, which was cut to 20.88 percent based on her computations following the implementation of TRAIN.

“Ngayon mas lalaki nga ‘yung mga incentives and commissions. So definitely ‘pag medyo mas malaki ‘yun, mas okay, mas may isi-save, mas may panggastos (Now I get more from incentives and commissions. So definitely, if you get more, you get to save more, you have more to spend),” Orolio said.

Orolio said she plans to invest her tax savings in insurance to save for the future while providing financial protection for her family.

Dana Pereira, who works as a teacher at a private school in Quezon City, said she also saw her take-home pay increase following the implementation of TRAIN because she now pays no tax at all.

Pereira’s husband, Alexis, who has been working for eight years in the information and technology sector, said he now enjoys an additional P6,300 per month because of TRAIN.

Meanwhile, Lydia, who has been working for 17 years as a preschool teacher and currently employed at the Goodwill Elementary School in Novaliches, Quezon City, said she saw her monthly pay increase from P5,700 before TRAIN to P9,500 after the tax reform law took effect.

Dominguez said 99 percent of the country’s individual taxpayers would benefit from TRAIN owing to hefty cuts in the PIT rates.

In effect, those with a taxable annual income of P250,000, on average, would be able to take home an extra income equivalent to a substantial one-month’s pay per year.

For those earning P250,000 and above, the tax brackets have also been adjusted so that those with taxable income of more than P250,00 but not above P2 million pay only between 20 and 30 percent PIT.

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