Noy rejects tax exemption for minimum wage earners

MANILA, Philippines – President Aquino has rejected a majority of the proposals of labor organizations, including tax exemption for minimum wage earners.

“On the taxes, VAT, etcetera… it would become an administrative nightmare to administer the proposed exemptions,” the President told labor leaders yesterday during a pre-Labor Day meeting at Malacañang.

In a chance interview with Palace reporters, the President clarified that he “did not refuse” most of the proposals.

“It’s just a question of agreeing on all of the details,” he said.

Aquino said he could not agree to the proposed tax exemption and raising the bracket of tax-exempt benefits from P30,000 to P60,000.

He said it would mean a P2.74 billion-revenue loss, which is equivalent to 300,000 classrooms, or more than 100,000 houses.
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“Is it reasonable to put at risk the education of our youth? Or deprive the poor of mass housing?” he asked.

The President said he would instead propose to Congress the allocation of “direct benefits” for Filipino workers.

He cited the allocation of a certain amount from the expected windfall from the Ninoy Aquino International Airport expressway project, which can be used as seed capital for educational loans.

“Let’s make the job of tax administration lighter, easier, and ensure that benefits go directly to them,” the President said.

On workers’ concerns over contractualization, the President said the labor department has set aside P180 million to hire 372 additional compliance officers to monitor companies.

“This is to make the implementation of labor laws more efficient, and avoid what we call ‘555,’ or those abusive employers who don’t renew the contracts of workers every five months,” he said.

“We expect that by October there will be improvements and they can help us arrest these abusive employers,” he added.

Labor groups blamed contractualization for the unchanged poverty level in the country since 2006.

Aquino said he is open to the proposed bill providing security of tenure for employees, but it should be guaranteed that it would not result in the loss of jobs.

“We want to tweak certain portions of the measure to make it… attain the intent of the measure without unduly affecting the competitiveness and then the availability of jobs,” the President said.

He said he is concerned about the “hesitation” of companies on certain provisions of the bill that will “deprive our workers of the opportunity to gain employment.”

On the issue of unexplained killings, Aquino said he had ordered prosecutors from the Department of Justice to expedite pending cases. –Delon Porcalla (The Philippine Star)