MANILA, Philippines – Labor group Trade Union Congress of the Philippines (TUCP) slammed the Duterte administration's proposed Corporate Income Tax and Incentive Rationalization Act (Citira), saying that 700,000 workers could lose their jobs.
Citing estimates by business groups, the TUCP said the government's economic managers are "hell-bent [on] pushing thousands of workers and their families towards the fire" through Citira.
The TUCP also said the Department of Finance (DOF) has so far failed to consult workers in economic zones regarding the possible impact of the proposed tax reform measure.
The group accused finance officials of "spreading half-truths" and "playing sinister over the lives of workers" for the passage of the bill.
"They’re 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," TUCP vice president Louie Corral said in a statement on Sunday, October 13.
What are the TUCP's concerns? The TUCP warned that the proposed allotment of P500 million which would support grants and programs of the Department of Labor and Employment (DOLE) would not be enough to cushion the blow if Citira is passed.
The group questioned how the government arrived at the proposed amount, saying that P500 million would be "highly insufficient" compared to day-to-day expenses and the rising cost of goods.
The TUCP also said moves to provide a safety net for workers in the Citira bill, which would come in the form of a monthly allowance, is not a "surefire formula" as workers would have to prove job loss due to the tax reform measure.
The TUCP urged DOLE to conduct a survey that would determine job loss from Citira in order to formulate "evidenced-based intervention" once the bill is passed.
The group also urged government agencies to put in place a "genuine transition program" for displaced workers before Citira's implementation – not after.
What's the bill about? Citira, which is the second tranche of the Duterte administration's Comprehensive Tax Reform Program, has been opposed by several business groups who have warned that it would drive away investors. (READ: [ANALYSIS] Will Duterte's new tax measure kill foreign investments?)
The bill, certified as urgent by President Rodrigo Duterte, is also heavily opposed by ecozone locators on fears that it would take away incentives and negatively affect the country's competitiveness. (READ: 'Noisy naysayers' vs Citira bill proven wrong by numbers, says DOF)
Citira seeks to place over a hundred laws pertaining to corporate tax incentives under one playbook, with the DOF stating that perks would only be given to "deserving" companies.
Aside from this, the bill seeks to make tax incentives targeted, time bound, and transparent. It also aims to gradually lower the country's high corporate income tax rate from 30% to 25%.