By Samuel P. Medenilla, October 9 2018; Business Mirror
Image Credit to Business Mirror
The Tax Reform for Attracting Better and High-Quality Opportunities (Trabaho) bill is expected to generate 1.4 million more jobs in the next decade if it becomes law.
“Our computation is the net gain in employment by 2029, when the lowest of the [adjusted] corporate tax will be reached at 20 percent,” Finance assistant secretary Antonio G. Lambino said in a press conference on Monday.
He said this was already contained in the report they submitted to the Senate and the House of Representatives (HOR) last week, where the bill (House Bill 8083) is still pending.
Aside from the DOF, Lambino said the National Economic Development Authority (NEDA) and the Department of Labor and Employment (DOLE) are conducting their separate projections which they will also submit to both houses of Congress.
He noted they welcome the additional studies on the same topic since it will lead to a more comprehensive projection on the effects of Trabaho bill.
“That being said, there is coordination [among the three agencies]. The conversations are being held [among them] and as I mentioned even the methodology is being checked,” Lambino said.
Lawmakers earlier said they will not be able to finalize their deliberations on the bill until they get a scope of its potential impact to the economy and labor.
IBON Foundation Executive Sonny Africa cautioned the public to be wary of the said rosy employment outlook of DOF.
“It is notoriously hard to estimate employment gains. There are too many variables,” Africa said.
In such a case, he said estimates from private companies are more reliable than that of the government since their estimates are on a smaller scale and include fewer variables.
Africa said the government may be just using the job projection to justify its “regressive” tax reforms.
Government economic managers earlier said the Trabaho bill will spur more employment opportunities by making local corporate income tax rates more competitive with that of other countries.
IBON Foundation, however, said even with lower income tax, local firms may not be able to generate enough jobs to meet the expectations of the government amid the declining global economy.
For his part, Federation of Free Worker (FFW) Vice President Julius Cainglet criticized the minimal labor impact of the much touted legislation.
“For a 11 year period, the projected jobs [to be created] from the Train law is too small,” Cainglet said.
The estimated net employment for the Trabaho bill is lower compared to projected employment opportunities for the Build, Build, Build program, which is pegged at 1.8 million jobs in the next four years.
The labor leader also said the tax reform does ensure the jobs to be created will be off good quality.
“There is no guarantee that companies will use their savings from the lower corporate income tax for hiring additional workers or providing higher salaries and benefits from their existing ones,” Cainglet said.