Tax reform finds ally in BPO leader

The Duterte administration’s Comprehensive Tax Reform Program (CTRP) yesterday received the backing of a business process outsourcing (BPO) industry advocate, saying the proposed law is favorable for both labor and management as it would raise the take-home pay of workers and enhance the workplace environment leading to higher productivity.

In a social media post, Call Center Philippines administrator Gerald Catapang said the CTRP was also a “win” for non-workers. Besides slashing income tax rates, he said the bill would also adjust other taxes to help the Duterte administration raise the extra P1 trillion it needs yearly for an aggressive spending program to improve the living standards of poor and low-income Filipinos.

“Reforming our personal income tax system will increase the monthly take home pay of call center agents by an average of P4,000, while adjusting other taxes will increase funding for health, training, and infrastructure investments crucial for the working environment of laborers,” Catapang said.

He said the CTRP’s first package, also known as the Tax Reform for Acceleration and Inclusion Act (Train), would adjust the outdated formula for income tax payments under the current system, which “has unfairly burdened the working class with rates that apply for higher income classes.”

Finance Undersecretary Karl Kendrick Chua said earlier that under the Train bill, a typical call center agent who earns P21,000 a month with a gross income of P273,000 inclusive of the 13th month pay and other benefits, would be exempted from paying personal income taxes.

Under the current system, the same call center agent, even with two dependents, still has to pay P21,867 in income tax because of an outdated structure in which his net taxable income of P136,834 is taxed P8,500 plus 20 percent in excess of P70,000.

Catapang said the additional revenues from the CTRP that would be earmarked for healthcare, among other priorities, was “crucial for the working sector,” who were the ”most vulnerable to physical and mental health issues.”

He likewise said “the increased funding for education and training arising from increased tax collections under the CTRP will also capacitate current and future workers as well as improve their performance and productivity.”