Job risks in focus as Senate starts work on 2nd tax reform

By Elijah Joseph C. Tubayan
Reporter
THE SENATE Ways and Means committee on Tuesday began discussions on corporate tax reform, zeroing in on potential risk to jobs when the government removes fiscal incentives deemed redundant.
Senator Juan Edgardo M. Angara, the committee’s chairman, noted that the government has not provided a study on potential job creation or losses upon implementation of the Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) bill, even as it has already been approved by the House of Representatives.
“I’m surprised that the Lower House passed this measure even without such study. The government should really take this issue on jobs seriously… before we pass the bill, dapat there’s a comprehensive job study,” Mr. Angara said during the bill’s first hearing at the Senate. “The bill should stay true to its name — that it would create more jobs rather than kill them.”
In the same hearing, Dominique R. Tutay, director of the Department of Labor and Employment’s (DoLE) Bureau of Local Employment, cited the risk of job losses, especially in industry and services. “Ang tinitignan po namin ay meron, ang tinitignan po namin dito ang technology-driven industries pag hindi po sila naka-cope (We believe there will be job losses, particularly in technology-driven industries that will not be able to cope with a loss of incentives),” Ms. Tutay said, adding that a DoLE and the Department of Finance (DoF) will “come up with accurate figures in terms of trends on employment” in two weeks.
The House of Representatives approved on final reading House Bill No. 8083 on Sept. 10, which seeks to cut the corporate income tax rate gradually from 30% currently to 20% by 2029 via a two-percentage-point deduction every other year starting 2021. Fiscal perks will be limited to industries identified in the Strategic Investments Priority Plan that satisfy performance indicators.
DoF Undersecretary Karl Kendrick T. Chua told reporters after the hearing that an assessment of potential job losses at this time is “not possible” since it remains to be seen how many businesses will qualify for perks under the new scheme.
“It’s going to be hard to determine this early until we know… who applied, who are redundant [<i>sic</i>] and so on.”