MANILA, Philippines — The Trabaho bill is not likely to cause job losses but the government is ready to implement measures that would assist workers who may be affected by the measure, the Finance department said Wednesday.
Finance Undersecretary Karl Chua said Congress has proposed the setting up of contingency funds to help workers who might be displaced once "unnecessary" tax incentives are removed.
"Unlikely. No, everything is possible but it is improbable. Everything is possible," Chua told reporters in Malacañang when asked whether Trabaho bill would cause job losses.
"It's Congress who proposed the fund just in case because I cannot guarantee 100 percent. But based on the reform we presented, it doesn't seem to be the case. At least we have something to offer. It's like a contingent fund in case there are people who will be displaced," he added.
Chua said the fund is just a "precautionary move" and that his agency has not estimated the number of jobs that might be lost because of the bill. He said the adjustment fund would be used to retool and provide cash grants to workers who might be affected.
Trabaho bill, formerly known as the package two of Tax Reform for Acceleration and Inclusion Act, aims to reduce corporate income tax rates from 30 percent to as low as 20 percent to make them closer to regional averages. It also aims to rationalize fiscal incentives by removing unnecessary tax perks.
Critics have expressed concern that the removal of some tax incentives would discourage businesses from investing in the country and result in job losses.
Finance officials, however, believe businesses would continue to invest in the Philippines despite the removal of some tax incentives because they are inherently profitable and there is a sure market for their goods or services.
"Our proposal is with regard to the necessary incentives, we will continue to help. We do not see any job losses. The unnecessary tax incentives will be removed gradually... I think if there is job loss, very minimal," Chua said.
Finance Assistant Secretary Tony Lambino said the reduction of the corporate income tax would benefit micro, small and medium enterprises, the livelihood source of majority of Filipino workers.
"Actually, MSMEs, in this case, will have more money so their productivity can improve and to enable them to expand. They will hire even more workers so we (expect) the Trabaho bill (to) be jobs positive," Lambino said.
Chua said the lower corporate income tax rate would allow small businesses to generate huge savings that they can use to expand and create jobs.
"Overall, even if there are possible job loss in one or two sectors, it will have a positive contribution to the overall economy," the finance official added. — Alexis Romero