ECOP president Rene Soriano said tax exemption is a better way to help workers cope with the impact of the expanded value-added tax (EVAT) instead of giving out salary increases, which would harm businesses.
"The adjustment of tax exemptions for wage earners is a measure which would address such a need without hurting the pockets of employers and businesses," he said in a statement.
Soriano explained that unlike a salary hike that would trigger an increase in the cost of production and prices of commodities, tax exemption would strengthen workers’ purchasing power and stimulate the economy.
He added that raising workers’ income tax exemption would stem the tide of dissent and head off labor unrest brought about by the imposition of the 12-percent EVAT rate last Feb. 1.
Soriano also urged Congress to hasten the deliberation and passage of pending bills seeking to raise the income tax exemption of workers, instead of focusing on enacting a pending measure seeking to grant a P125 across-the-board salary increase.
The moderate Trade Union Congress of the Philippines (TUCP) earlier demanded the immediate granting of an additional tax exemption, which would enable workers to cope with the expected increase in the prices of essential commodities.
The TUCP is pushing for the passage of a measure that would double the current P32,000 allowable deduction for a working couple and allow a husband and wife to separately file for personal exemptions.
However, militant labor groups are pressing for the immediate passage of the bill seeking to grant a P125 across-the-board increase in the daily take-home pay of workers nationwide.
While they welcome additional tax exemptions, labor groups led by the Kilusang Mayo Uno said workers need a salary increase to recoup their eroded purchasing power.