MANILA — There will be no substantial job losses under the second package of the Tax Reform for Acceleration and Inclusion (TRAIN), the Department of Finance (DOF) assured on Wednesday.
DOF Undersecretary Karl Kendrick Chua described TRAIN 2 as a “job-creating reform” noting that the tax incentives system will be “performance-based, targeted, time-bound, and transparent.”
Chua explained that the government will continue to give “necessary” incentives to efficiency-seeking firms such as exporters.
Meanwhile, firms which have been long-term recipients of incentives, have high-profitability, are domestic market-seeking, and resource-seeking will be considered “unnecessary” to receive incentives.
“Wala po kaming nakikitang (We do not foresee any) job losses. The firms that need the incentives, because they are exporters, we will continue to help them. The unnecessary ones–meaning they have a sure market, they are profitable–we are sure that they will continue to keep their operations,” Chua said in a Palace briefing.
Chua also allayed fears that firms that will no longer be receiving tax incentives would result to job losses.
“Napakaraming examples ng (There have been many examples of) reforms in the past wherein the initial fear of job loss proved to be very wrong,” Chua said.
He cited how telecommunications giant PLDT and flag carrier Philippine Airlines (PAL) earlier expressed concern that liberalizing the industry would result to job loss but instead, it eventually led to creating more jobs.
If there were job losses, it would only be “temporary” since the long-term effect would be “positive”, he said.
Chua, however, assured that as a safety-net, there will be cash grants given to temporary job losses.
“Kung may job loss, very minimal at ang ginawa po ng Trabaho Bill (TRAIN 2) ay naglaan po sila ng adjustment fund to retool and provide cash grants to workers who may be affected,” Chua said.
“That’s why we do not see job losses. In fact, this is the bill or reform that will massively create jobs for the economy as a whole,” he added.
TRAIN 2 seeks to lower corporate income tax and rationalize fiscal incentives which meant that the government will continue to give incentives to “deserving” firms only.
However, some lawmakers wanted TRAIN suspended or postponed amid the country’s rising inflation rate.
Despite the upcoming mid-term elections next year, Chua was hopeful that Congress will still prioritize the second package of TRAIN.
“They’re also reviewing and evaluating the budget and that also means they will see the need for this tax reform kasi paano naman ipo-pondo yung budget kung wala pa tayong passed reform (because how will we fund the budget if we don’t have the reform),” Chua said.
“Whether or not may election or wala (not), I think this is an important reform,” he added. (Azer Parrocha/PNA)
