Samuel P. Medenilla | BusinessMirror | October 14, 2019
The country’s largest labor group said there can be no real debate on the proposed Corporate Income Tax and Incentives Rationalization Act (Citira) if the government will not conduct an evidence-based study on the bill’s potential impact on workers.
Trade Union Congress of the Philippines (TUCP) Vice President Louie Corral criticized government economic managers for “holding out crucial information” on the bill, which seeks to rationalize fiscal incentives.
“Tell us how many workers are really going to lose their jobs in order to formulate an evidence-based intervention once the Citira is enforced,” Corral said.
Officials of the Department of Finance (DOF) and Albay Rep. Joey Salceda have been saying the passage of the tax reform will lead to a net employment of 1.5 million.
However, the DOF and Salceda have yet to issue more details on where these jobs will be created and workers who may lose their jobs if the Citira bill is enacted.
A business group has estimated that at least 700,000 jobs will be lost if Citira is implemented.
Corral said the government study on the impact of Citira on the labor sector will determine the intervention that the State should implement for those who will be displaced once Citira takes effect.
“[Officials] are saying workers will be protected and new jobs will be created with Citira, but if you take a closer look at the measure, these provisions are insubstantial and vague when it comes to protecting jobs and providing safety nets for workers,” Corral said.
The labor leader is urging the Department of Labor and Employment to conduct the study on Citira’s impact with stakeholders, including labor groups.
The Citira bill, which hurdled the House in September, will reduce the CIT rate to 20 percent by 2029, from 30 percent at present—the highest among Southeast Asian economies—and will overhaul the menu of incentives granted to economic zone firms.
It also removes the perpetual 5 percent on gross income earned. Under the bill, it will strive to encourage investors and locators to reapply after the five-year or seven-year period, to qualify for another five years of incentives.