The labor group Trade Union Congress of the Philippines slammed the Department of Finance for pushing the Corporate Income Tax Incentives Reform Act without consulting the labor sector, saying more than 700,000 workers would be displaced if the new tax scheme should become a law.
“Our economic managers, led by the Finance department, is (sic) about to push thousands of workers to fall through the cracks by introducing Citira tax scheme in the same way they shove workers and their families’ throat with the TRAIN Law inflation with no consultations with grossly affected workers’ sector,” TUCP president Raymond Mendoza said in a statement.
Firms affected by the process may close down and transfer to another location or may be forced to cut jobs and displace around 703,000 workers.
The DOF is seeking Congress’ approval for the second package of the Comprehensive Tax Reform Program, known as the CITIRA bill.
The measure seeks to entice investors by lowering the corporate income tax to 20 percent from the current 30 percent by overhauling the tax incentives enjoyed by firms.
Citira is the renamed version of the Tax Reform for Attracting Better and High-Quality Opportunities bill that the House had passed in the previous 17th Congress.
The Trabaho bill, however, ran out of time in the Senate and had to be refiled in the 18th Congress.
The measure would also remove certain tax perks enjoyed by companies in the country.
The Citira bill retains the current incentives for two years, for investors to have enough time to adjust to the new tax scheme. Perks would also be targeted, time-bound, and transparent.
Though the measure allotted P500-million annual budget for grants and support programs of the Department of Labor and Employment for displaced workers in companies affected by the corporate income tax adjustments, the TUCP accused the DOF ignoring workers plight when it comes to the implementation of the law.
“Workers got nothing from TRAIN Law despite of the budget provisions it has for affected sector. Now our white-collared Finance people are again deliberately playing dice on the lives of workers and their families by dangling an annual budget provisions for displaced workers and by sugarcoating CITIRA with a million jobs it supposes to create,” Mendoza said.
Mendoza said the P500 million yearly budget for CITIRA-displaced workers is highly insufficient compared with the day-to-day expenses amid rising cost of living created by TRAIN Law.
“How did they arrive with the amount? How many firms would really be affected by CITIRA? How many workers would really be affected? What are these government programs that could save the thousands of displaced workers?” said Mendoza.
The TUCP is proposing a genuine transition program for displaced workers prior to the implementation of CITIRA and not after its implementation.
The group is asking the economic managers for labor consultations on CITIRA and on other programs and policy reforms affecting the labor sector.