The chairman of the House of Representatives Committee on Ways and Means has backed the enactment of a measure that would encourage businesses to hire “mature workers” or those aged 40 and above by granting them tax cuts.
“The productivity gains to hiring workers with life experience will be immense. Under the current culture, most employers hire only fresh graduates. They are less enthusiastic about taking older applicants in. This is of course a problem, especially because many older applicants have families to support,” committee chairperson Albay Rep. Joey Salceda said.
He said the ageist culture “wastes the valuable accumulation of skills that only older employees can deliver for a firm.”
“I see the productivity gains this will unlock, as an economist. And as people are living longer and our pension systems are taking a toll, opening opportunities for more mature employees, especially the elderly, to work will pad our pension systems,” Salceda added.
He, however, warned principal authors that the Executive branch may push for a veto of the tax provision if the case for it is not “well-argued and well-established.”
“This is not a revenue measure, so if a provision can be vetoed, the whole bill will not be approved. That is why I hope to propose some revisions to the proposal so that we can push it through enactment,” Salceda said.
Salceda assigned lawmakers Estrellita Suansing of Nueva Ecija, the committee’s senior vice chair; Sharon Garin of the AAMBIS-OWA party-list, the committee vice chair; and Jericho Nograles of the PBA party-list, to recommend to him an alternative formulation of the tax provision.
Under the current proposal, firms that hire “mature employees” will be “entitled to an additional deduction from their gross income, equivalent to fifteen percent of the total amount paid as salaries and wages.”
This means that 115 percent of labor expenses for covered hires will be recognized by the Bureau of Internal Revenue as a deduction from gross income for purposes of taxation.
Salceda warned the provision is still vague in terms of hiring procedure and cap on credits, among others.