TAX EXEMPTION OF MILK, GROUNDED & 3-IN-1 COFFEE, MEDICINES FOR

DIABETES, CHOLESTEROL & HYPERTENSION, 100% NATURAL FRUIT AND

VEGETABLE JUICES, MEL REPLACEMENT AND INDICATED BEVERAGES, AND

BEVERAGES SWEETENED WITH COCO SUGAR OR STEVIA

In Partial Fulfillment of the Requirements in the Course Fundamentals in Information

System and System Development for the Degree of Bachelor of Science in Business
Administration Major in Management Accounting

BY:

MONDIA, ROSHELLE B.

CONSUELO, REGINE C.

JANUARY 2018
 ABSTRACT

This study aimed to provide reliable information about the New Tax Reform Law
and the personal point of view of the people regarding with the exemptions of the said
products and beverages.

The proponents used interview questionnaires, oral interview and laptops for
their documentation.

Therefore, the proponents conclude that the New Tax Reform Law brings joy and
hope to Filipino people.

STATEMENT OF THE PROBLEM

1. Why does milk, 3-in-1 coffee, medicines for diabetes, cholesterol and
hypertension, 100% natural fruit and vegetable juices, meal replacement and
indicated beverages, and beverages sweetened with coco sugar or stevia
exempt from tax?

2. Is it an advantage or not for the majority of the people?

OBJECTIVES

The objective of the proponent is to provide accurate information about the

tax exemption of milk etc. and to conduct a research on how this New TRAIN
Law affects the people.
 SCOPE AND LIMITATION

This study exclusively focus only on Tax Exemption of milk, 3-in-1 coffee,
medicines for diabetes, cholesterol and hypertension, 100% natural fruit and
vegetable juices, meal replacement and indicated beverages, and beverages
sweetened with coco sugar or stevia, not the whole scope or highlight of TRAIN
Law. The proposed study aim to gather information whether the New Tax Reform
brings joy or disappointment to Filipino People.

Definition of Terms

 TRAIN Law – stands for Tax Reform for Acceleration and Inclusion (R.A.
No. 10963. It is the first package of the comprehensive tax reform program
(CTRP) envisioned by President Rodrigo Roa Duterte’s asministration.
 Stevia – a white powder composed of one or more intensely sweet
glycosides derived from the leaves of stevia ( a shrubs and herbs of
tropical subtropical America).

METHODOLGY

The components prepared some interview questions and conduct

an oral interview with the store owners, employed and non-employed
individuals and keep some records of it to back up their study. Data is
given below.

A GUIDE QUESTIONS FOR RESEARCH PAPER

(A PARTIAL REQUIREMENT IN BUSINESS AND TRANSFER TAX)

DATE: January 31, 2018

Name of Interviewee (optional): Maricel Llanet “LabLab Store”
Questions (regarding to the New Tax Reform or TRAIN Law)
1. Are you aware of the New Tax Reform?
ANSWER: YES.
2. Is it an advantage or not?
ANSWER: Advantage.
3. Regarding with the exemption of milk, 3-in-1 coffee and medicine for
diabetes, cholesterol & hypertension from Tax, is it favorable to you?
ANSWER: YES, it is favorable mostly because I manage a retail store.
 BACKGROUND INFORMATION

TRAIN Law is the administration’s biggest Christmas Gift to the Filipino people.
On December 19, 2017, President Rodrigo Roa Duterte signed the R.A No. 10963 also
known as TRAIN Law and it was implemented last January 1, 2018. TRAIN aims to
make the current tax system simpler, fairer, and more efficient. This change was
brought to fund the “Build, Build, Build program” by the government for the first five
years. Revenues from the TRAIN will fund our priority projects to ensure quality
education, including free tuition in State Universities and Colleges, quality health care,
social protection and conditional cash transfers, and improved infrastructure. Highlights
of TRAIN are Income Taxes, Value Added-Taxes, Sugar-Sweetened Beverages,
Excise Tax (Petroleum, Automobile and Tobacco), Cosmetic Tax, Donor’s Tax, Estate
Tax, Coal and Nonmetallic Minerals and Quarry Resources.
However, sale of drugs for diabetes, high cholesterol, and hypertension are VAT-
free, effective 2019. 3-in-1 coffee is excluded from Sugar-Sweetened Beverages Tax
alongside with all the milk beverages, 100% natural fruit and vegetable juices, meal
replacement and medically indicated beverages, and beverages sweetened with Coco
sugar or stevia.
Some might wonder why they are exempted from tax. There is no denying that
Filipinos have a sweet tooth with obesity and diabetes becoming a worldwide problem,
taxing sweetened beverages might limit some of our fondness for sugar. One of the
reason why beverages like 100% natural fruit and vegetable juices are exempt from tax
is that they never undergo any processing procedures, simply stated they were still in
their original state. 3-in-1 coffee and milk seems to be part of basic needs and
everyday routine of the Filipino. Infant, adult and even senior citizen drinks milk, and
out of 100%, almost 80% of Filipino people “coffee is their life”, it was like their energy
booster either in urban places or rural areas. It was like the whole world drinks 3-in-1
coffee and milk, so it was burdensome to tax beverages of that kind.
Medicines for diabetes, cholesterol and hypertension are also tax-free this is
because for the past years these conditions are become threat to human life of Filipino.
This was the primary cause of stroke and death. Before, Filipinos especially those who
are in lower level of economy cannot afford to buy these medicines. With the New Tax
Reform Law, the administrative goal is to reduce the poverty rate from 26% to 17%
uplifting about 10 million Filipinos from poverty.

CONCLUSION

The proponents therefore, conclude that the exemption of such mentioned above
under the New Tax Reform Law is an advantage for majority of Filipino regardless of
their work, levels of income and economic level. With the TRAIN Law, all are just and
equal.