THE Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) said on Wednesday that it is deeply worried over the adverse effect of the Tax Reform Inclusion and Acceleration (Train) Law to members of the informal economy.
Informal economy is the part of an economy that is neither taxed, nor monitored by the government. The concept originally applied to self-employment in small unregistered enterprises.
ALU-TUCP spokesperson Alan Tanjusay said vendors, fisherfolks, farmers, public utility vehicle and pedicab (cycle rickshaw) drivers, among others, would face harder circumstances now that the law is in effect.
“If not addressed, the brewing social storm would create bigger and wider poverty among our people. Workers are already burdened with pre-existing bad conditions and encumbered with traffic congestion and high cost of living. The unclear, if not inadequate social safety net, will offer no hope for workers in coping with rising inflation,” Tanjusay said in a statement.
Worse, the labor leader said, these impoverished informal workers may be forced to resort to illegal activities just to have enough means to live.
"Unaddressed poverty will push more people to cross the line, resort to illegal means such as criminality, violence, and illegal drugs in order to survive," Tanjusay added.
The Train Law (Republic Act 10963) exempts from paying taxes the first P250,000 annual taxable income, meaning those earning P21,000 a month would no longer need to pay income taxes. It also raises the tax exemption for 13th month pay and other bonuses to P90,000.
However, to compensate for loss of revenue from income taxes, Filipinos will need to pay excise tax on sweetened beverages, and higher excise taxes on petroleum, automobile, tobacco, mining and coal.
As for the formal sector, Tanjusay said it is looking at filing wage petitions in a bid to counter the effects of the tax reform law.
He said they are eyeing at the possibility of simultaneously filing wage petitions in all 17 regional wage boards once they have enough basis to ask for wage adjustments.
"If the situation warrants, we will file the petition for workers to cope with rising cost of living even if the one-year prescribed for no wage increase period set by the wage board is still in effect,” said Tanjusay.
He said they will be making a decision as soon as they see substantial increases in the prices of basic commodities such as rice, fish, and vegetables; as well as in the cost of services such as transport fare, tuition fees, electricity, and water rates.
"All we can do for now is put our ears close to the ground and monitor the impact of Train Act to the inflation,” said Tanjusay. (HDT/SunStar Philippines)