WE are 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.
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.
Worse, 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.
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, we are looking at filing wage petitions in a bid to counter the effects of the tax reform law. We are eyeing the possibility of simultaneously filing wage petitions in all 17 regional wage boards once they have enough basis to ask for wage adjustments.
All we can do for now is monitor the impact of TRAIN Act to the inflation rate.--Alan Tanjusay, spokesperson, ALU-TUCP