Employers back tax cuts, not wage hikes

ILOILO CITY—Scrap, suspend or reduce taxes on petroleum products but don’t raise wages.

Employers’ groups here took this position amid a growing clamor for government to raise wages to help the poor cope with the effects of a continuing increase in oil prices.

Joe Marie Agriam, president of the Chamber of Commerce and Industry of Iloilo Inc. (CCII), said the government should remove the 12 percent value-added tax (VAT) on petroleum products to keep fuel prices from further increasing.

The CCII is composed of at least 89 employers’ groups in the city.

“We believe that this is an option that the government should take because oil price increase is continuing,” Agriam told the Philippine Daily Inquirer on Tuesday.

Other business groups, including the Iloilo Multi-Sectoral Business Organization Inc. (IMSBOI) composed of at least 13 business organizations, and the Iloilo Business Club (IBC) also supported the removal of VAT on petroleum products.

“Everybody will benefit from the VAT removal,” said Gudelia Coo,
IMSBOI secretary, in a phone interview on Wednesday.

President Benigno Aquino III earlier announced that the government was not keen on removing the VAT on petroleum products because this would mean a loss of at least P1 billion a month for government.

The President said instead of removing VAT on petroleum, the government was putting together a subsidy program that would reduce the cost of fuel for public transport operators.

Militants, however, criticized the plan as just a stop-gap measure.

Members of the wage board in the National Capital Region said a wage increase may be necessary.

Employers here said increasing wages was not the correct response to price increases.

Agriam said employers, not just workers, are hurting from oil price increases. “Production and other costs have also increased,” he said.

Labor groups in Western Visayas are pressing for an increase of P97 to P99 in daily minimum wage from the current P265 per day.

Wennie Sancho, labor representative in the wage board of Western Visayas, said a wage increase was more than justified to allow workers to cope with oil prices that have gone up from P38.50 per liter of diesel in January to at least P51.25 per liter in March.

Last Wednesday, oil firms imposed an additional P1.50 to P1.75 per liter increase.

Sancho said the actual value of the P265 daily minimum wage dropped from P160 in August to just P154 in March.

Regional wage boards are currently determining if there are “supervening conditions” to justify wage increases.

“What more proof do we need to show supervening conditions?” Sancho said in a telephone interview on Wednesday.

He said labor groups were gearing for protest actions to press their demand for a wage increases. –Nestor P. Burgos Jr., Inquirer Visayas