THE six biggest labor groups and alliances in the Philippines on Friday expressed their unity in strongly supporting the reduction of workers’ withholding taxes.
Alan Tanjusay, spokesperson of one of the alliances, the Trade Union Congress of the Philippines and Nagkaisa (TUCP-Nagkaisa), said the two labor alliances together with the newly-formed Labor Party of the Philippines (LPP) have not withdrawn their strong support to the efforts of three senators and two congressmen who aim to lower the percentage of the taxable income of salaried workers since it will surely help raise the purchasing power of every employee.
Tanjusay, who is also the chairman of LPP, said that TUCP, Nagkaisa, and LPP are thinking of different forms of struggle to convince President Aquino 3rd on the correctness and positive effect on the economy should the workers’ tax cuts be approved.
At present, the withholding taxes on workers’ income range from 10 to 30 percent annually depending on the yearly salary.
Minimum wage earners are exempted from tax cuts.
Proposed laws being tackled in both chambers of the Congress and the Senate have two intentions: widen the coverage of the low withholding taxes on the one hand, and increase corporate taxes on the other hand.
Despite the fact that this proposal could add up to his good legacy, Mr. Aquino vehemently opposed the idea of the pro-administration lawmakers, including his first cousin, Sen. Benigno Paolo “Bam” Aquino 4th, due to the possible downgrading of the Philippines’ credit capacity ranking.
Even Bureau of Internal Revenue Commissioner Kim Henares was more concerned on the country’s possible downgraded credit rating, rather than the increase of the workers’ purchasing power.
Wilson Fortaleza, spokesman of Partido Manggagawa (PM), stressed the truth of the matter that workers with a living wage less than P1,500 per day must be exempted from paying a withholding tax.
He said tax exemptions on the biggest number of workers, both in the private and government sectors, have been a long-time agenda of PM.
Fortaleza added that the utmost concern of PM is to increase the living wage of the Filipino working class, saying it is an important issue that his group will bring up in the House of Representatives not only today but also in the future.
Sonny Matula, president of the Federation of Free Workers (FFW), pointed out that reduced withholding taxes for the salaried workers not only brings a good effect on the workers but more so in the country’s economy.
Matula, who is also a lawyer, said the tax cuts on the annual income of the salaried workers are definitely beneficial to the economy because more workers could buy more products.
Bukluran ng Manggagawang Pilipino (BMP) President Leody de Guzman strongly agreed with his fellow labor leaders, saying the “tax exemption would result in the much-needed increase in take-home pay for wage and salaried workers who earn more than the atrociously-low minimum wage and are not covered by the orders of the regional wage boards since their creation in 1989.”
He said he could not understand why Mr. Aquino rejected the idea of tax reduction when in fact it “would not cause a big loss in the tax base for the Bureau of Internal Revenue (BIR), since the increase in take-home pay will spur consumption and increase the collections for the value-added tax.”
De Guzman could not hide his disgust with the Aquino administration because it could “afford to give billions in tax breaks and incentives to foreign multinational monopolies … [but]it has the gall to complain of the P30 billion that would be reduced from the nation’s coffers due to the [tax reduction on withholding taxes].”