MANILA, Philippines – Without fixed wages and not covered by social protection benefits, the country’s informal sector workers are among those who stand to be worst hit with the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) bill,a labor federation said Monday.
The Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) estimated around 15.6 million underground economy workera will be affected when the TRAIN bill is signed into law.
Expected to be signed into law on Tuesday, December 19, the measure reduces the individual income tax, but increass the excise tax on fuel products, new vehicles, tobacco products, and sweetened beverages that could push up prices of commodities.
“Informal sector workers working in the informal economy will be run over by the TRAIN,” Alan Tanjusay, ALU-TUCP spokesperson, said.
“Getting no direct benefits from the tax reform package, these underground economy workers will fall further way below the poverty. Many forms of poverty will manifest because of widening poverty created anew by this TRAIN,” he added.
Informal economy workers are those independent, self-employed, small-scale producers and distributors of goods and services. They may be jeepney drivers, tricycle drivers, pedicab drivers, taxi drivers, all kinds of vendors, sales attendants, barbers, cooks, waiters, dishwashers in carinderias and canteens, tailors, sewers, porters and street sweepers.
Though the TRAIN widened the base of those exempt from income tax from minimum wage earners to mid-level wage earners by exempting those employees getting P250,000 a year or P21,000 a month and raised taxable bonuses from P82,000 to P90,000, these cannot mitigate the impact of TRAIN on the underground workers, Tanjusay said.
“Underground economy workers will be impacted by the rise in prices of commodities and in increase in the cost of services caused specifically by the TRAIN’s excise tax on fuel, sweetened beverages, and coal,” he said.
Informal economy workers are not covered by labor laws and standards. They have no Social Security System (SSS), Philhealth, and Pag-ibig, unlike the waged employees.
“The TRAIN has no policy or program for them. We urge government to improve its social safety net protection to underground economy workers to save them further from falling deep into extreme poverty. This is the only way we can protect them,” he said.