A leader from the business process outsourcing sector has sought speedy congressional approval of the first package of Comprehensive Tax Reform Program (CTRP), which he described as a “win-win” for both labor and management as it will raise the take-home pay of workers and enhance the workplace environment leading to higher productivity.
Gerald Catapang, the administrator of the Facebook community page Call Center Philippines, said the CTRP is also a “win” even for non-workers because alongside slashing income tax rates, the bill will adjust other taxes to help the Duterte administration raise the extra P1 trillion it needs yearly for an aggressive spending program to improve the living standards of poor and low-income Filipinos.
“Reforming our personal income tax system will increase the monthly take home pay of call center agents by an average of P4,000, while adjusting other taxes will increase funding for health, training, and infrastructure investments crucial for the working environment of laborers,” Catapang said.
Catapang said the additional revenues from the CTRP that will be earmarked for health care, among other priorities, is “crucial for the working sector,” which is the ”most vulnerable to physical and mental health issues.”
He likewise pointed out that “the increased funding for education and training arising from increased tax collections under the CTRP will also capacitate current and future workers as well as improve their performance and productivity.”
“It’s a win-win for employees, businesses, and most especially the whole nation, so we truly hope the Congress will pass this with urgency,” added Catapang.
Catapang said the CTRP’s first package, also known as the Tax Reform for Acceleration and Inclusion Act (TRAIN), adjusts the outdated formula for income tax payments under the current system, which “has unfairly burdened the working class with rates that apply for higher income classes.”
“TRAIN will not only lower the tax rates for the middle class and other working classes but it will also effectively exempt 83 percent of the labor force from paying taxes,” Catapang said.
“In addition, the bill addresses other taxation issues which will result in fulfilling the annual investment target of an additional P1 trillion annually,” he added.
Finance Undersecretary Karl Kendrick Chua said earlier that under the TRAIN bill, a typical call center agent who earns P21,000 a month with a gross income of P273,000 inclusive of the 13th month pay and other benefits, will be exempted from paying personal income taxes.
Under the current system, the same call center agent, even with two dependents, still has to pay P21,867 in income tax because of an outdated tax structure in which his net taxable income of P136,834 is taxed P8,500 plus 20 percent in excess of P70,000.
The House started plenary discussions last May 23 on the substitute bill, House Bill No. 5636, which its Committee on Ways and Means passed last May 15 after consolidating the original measure endorsed last year by the Department of Finance—House Bill No. 4774—with 54 tax-related bills in the chamber.
Just recently, over 200 representatives of nongovernment organizations and other civil society groups have called on the two chambers of the Congress to “swiftly pass” TRAIN, which, they said, would spell the long-overdue correction of the country’s tax system and complement initiatives for transparency and participatory governance leading to sustainable growth and development. (PNA)
