Second tax reform package needs labor consultations – TUCP

MANILA, Philippines – The Trade Union Congress of the Philippines (TUCP) is urging the government to consult the labor sector on the Corporate Income Tax and Incentives Rationaliization Act (CITIRA).

The workers said to dismiss job loss and capital flight as ordinary and temporary consequences of CITIRA is the height of insensitivity of President Duterte’s economic managers.

“Creating more jobs and retaining existing ones should be the centerpiece of any economic reform. It should not just be about blind compliance to World Bank prescriptions,” TUCP said in a statement before the weekend.

The labor group recalled the hardships TRAIN 1 brought to the lives of minimum wage earners, who were sideswiped by the value added tax (VAT) and excise taxes that increased inflation.

TUCP also cited the sacrifice of 1.5 million Filipino rice farmers after implementation of the rice tariffication law that was intended to lower rice prices.

The workers warned the people that the government’s latest tax measure could result in job losses despite the supposed provision of a P500-million safety net. 

The Department of Trade and Industry (DTI) said a worse case scenario would have affected companies transfer to Vietnam and Indonesia, with some 900,000 jobs lost.

The economic managers are so focused on the books, they do not know that workers are humans and not robots in assembly lines, TUCP said.

Instead of rushing to pass CITIRA, the DTI, Department of Finance (DOF), National Economic and Development Authority and Department of Labor and Employment (DOLE) should tell the people what jobs would be affected by the new law.

The Joint Foreign Chambers of Commerce have warned that 120,000 direct hire jobs will be lost and that 580,000 indirect hire jobs will go down the drain.

That means 700,000 workers and their families would be affected by the CITIRA.

The seven million workers who are indirectly hired because they are part of the supply chain of these locators would also be affected.

Instead of steamrolling the passage of CITIRA, the DOF should take a second look at the issues of the proposed reforms and generate simulations and employment impact studies as to what jobs may be lost.

Sequencing is key to any workable policy reform, the labor group said, adding DOF and DOLE must do the hard numbers with both business and labor sectors on board.