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15.6 million informal workers to be hit by TRAIN

December 18, 2017

QUEZON CITY – Not covered by labor standards and without social protection benefits, around 15.6 million most vulnerable underground economy workers will suffer more once the tax reform package Tax Reform for Acceleration and Inclusion (TRAIN) is approved and implemented by 2018, said workers’ group Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP).

“Informal sector workers working in the informal economy will be ran over by the TRAIN. 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,” said ALU-TUCP spokesperson Alan Tanjusay.

Informal economy workers are those independent, self-employed, small-scale producers and distributors of goods and services. These are comprised of 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.

“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,” Tanjusay said.

Informal economy workers are not covered by labor laws and standards. They have no Social Security System (SSS), Philhealth and Pag-ibig to help them in time of their need.

“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 added.