Probe of wage violators for potential tax dodging sought

THE Trade Union Congress of the Philippines (TUCP) has urged the Aquino administration to investigate thousands of firms found underpaying their workers and violating other general labor standards, saying they are potential tax dodgers too. “The Bureau of Internal Revenue should immediately audit the erring firms for possible non payment or underpayment of their tax obligations,” TUCP secretary general and former Sen. Ernesto Herrera said.

“Firms that defraud their workers of lawful wages, or deprive their staff social security protection and other statutory benefits, are several times more likely to be cheating as well in their tax payments,” Herrera explained.

“On the other hand, firms dutifully complying with labor standards are several times more likely to be truthfully declaring their income and responsibly paying their tax liabilities,” said the former senator who used to chair the Senate committee on labor, employment and human resources development.

Herrera made the statement as the administration stepped up its drive against tax evasion.

The Department of Finance and the Department of Justice have vowed to file at least two criminal charges every week against suspected tax dodgers and smugglers.

The Bureau of Working Conditions inspects thousands of firms every year, and up to 20 percent of them are found underpaying the minimum wage, depriving workers their 13th month salary and overtime pay, according to Herrera.

He said other firms are found cheating their employees of their extra pay for work on holidays or unlawfully withholding their social security premiums.

Besides overpricing and producing substandard goods and services at the expense of consumers, Herrera said there are only two ways by which unscrupulous firms cut corners to rake in excessive profits—by shortchanging workers and cheating on taxes.

Herrera urged the Department of Trade and Industry and the Department of Labor and Employment to combine forces in ensuring the rigorous enforcement of, and compliance with new regional minimum wage rates and other labor regulations.

“Firms that underpay their workers or violate other labor standards compete wrongfully and unfairly with law-abiding establishments that are properly compensating their employees,” Herrera said.

“We recognize that every business is entitled to earn a reasonable profit. However, respect for basic labor rights should form part of the framework within which every business must compete freely and honorably,” Herrera stressed. –Manila Times