Labor group wants backup plan for CITIRA job losses

MANILA, Philippines — Labor group Trade Union Congress of the Philippines (TUCP) is urging government to come up with plans and impact studies for workers to be displaced when the proposed second package of tax reform to rationalize fiscal incentives is passed.

Instead of rushing to pass the Comprehensive Income Tax and Incentive Rationalization Act or CITIRA, TUCP vice president Luis Corral said the Department of Finance (DOF), Department of Trade and Industry, National Economic and Development Authority and Department of Labor and Employment should present studies on the number of job losses and action plans for those who will be displaced when the proposed bill is implemented.

TUCP raised the concern amid estimates of job losses from industry groups once the CITIRA bill is enacted into law.

CITIRA seeks to reduce the corporate income tax rate to 20 percent gradually from the current 30 percent and change the incentives regime to make the grant of tax perks transparent, performance-based, targeted and time-bound.

The bill is among the legislative priorities mentioned by President Duterte during his State of the Nation Address in July.

The proposed measure has been approved on third and final reading at the House of Representatives, but is still being deliberated at the Senate.

The Joint Foreign Chambers (JFC) of the Philippines estimates that 700,000 individuals would lose their jobs when CITIRA is passed and implemented.

In response, Finance Undersecretary Karl Kendrick Chua said, JFC should back its claims on job losses, citing the proposed measure would instead create 1.5 million jobs.

“Workers must have a place in the table to be consulted on CITIRA. To coldly dismiss job loss and capital flight as ordinary and temporary consequences of CITIRA is the height of insensitivity of the President’s economic managers. Creating more jobs and retaining existing ones should be the centerpiece of any economic reform,” TUCP said.

Corral said the group wants to hear government’s plan for the affected workers, particularly if there would be seamless transition for affected workers because of CITIRA and if the workers who will be displaced have the skills to match the new jobs DOF claims would be created.

Rather than dismissing the estimated job losses, he said the DOF should come up with an impact assessment study on workers when CITIRA is passed.

“Is there indeed any DOF study as to what existing jobs may be lost? Also, the DOF claims that 1.5 million new jobs will be created. We hope they did not pick out that number out of thin air. Where is their study on jobs that will be lost and jobs that will be created because of CITIRA?” Corral said.

“We gently ask the DOF these questions, because once the worker loses his job when CITIRA is passed, he will find there are no new jobs out there,” he added.