Cebu City mulls tax amnesty to help biz cope with wage hike

·3 min read

THE Cebu City Government is now eyeing to provide tax amnesty to businesses that cannot cope with the recently approved wage increase in Central Visayas.

In a press conference Wednesday, May 25, 2022, Mayor Michael Rama pleaded to business owners to absorb and endure the P31/day increase approved by the Regional Tripartite Wages and Productivity Board (RTWPB) Tuesday that is still subject to the National Wages and Productivity Commission’s review.

“I am pleading that employers may be able to absorb and utong (endure). Then let us all help as one country. With the new president, vice president and new secretaries, I am pretty sure that the economy is really a focus of this administration,” said Rama.

The mayor said any disruptions in the workforce like layoffs in the private sector would boomerang back to the government.

Rama said the tax amnesty will be studied since it might affect the City’s budget. And if the government’s tax collection will be reduced, public services will also be affected.

Meanwhile, the Cebu Chamber of Commerce and Industry (CCCI) sees a possible increase in selling prices and production costs of some companies following the minimum wage increase.

CCCI president Charles Kenneth Co said Wednesday that the increase was on the “high end of their expectation.”

But Co assured that it would likely not result in massive layoffs.

“I believe it is a fair increase. It was higher than we expected, but our workers also need it. Businesses need to focus now on increasing productivity and output in order to cope with the increase in labor cost so we can maintain our operations without letting go of workers,” said Co.

The chamber also welcomed the plan of the Cebu City Government to offer a tax amnesty.

“The amnesty will be a welcome reprieve, but the City will need to be careful how it selects affected businesses,” said Co.

On Wednesday, labor group Alyansa sa mga Mamumuo sa Sugbo-Kilusang Mayo Uno (AMA Sugbo-KMU) called the P31 wage increase in Central Visayas an “insult to workers” as it is less than the wage hike approved in Western Visayas.

The RTWPB-Western Visayas approved a P55 increase in wages for companies with more than 10 workers, and P110 for those employing 10 or fewer workers.

“Does our wage board mean to say that basic goods are cheaper here in Cebu than in Western Visayas? This is a huge insult to the workers who know the real prices and the expensiveness of consumer goods here in the region, so much so that the minimum wage is not enough,” said Jaime Paglinawan, chairperson of AMA Sugbo-KMU, in a statement.

The organization supported the wage hike petition for a P750 national minimum wage of the Alyansa sa mga Mamumuong Kontraktwal sa Sugbo (ALSA Kontraktwal Cebu) last March.

Under the new wage order, Metro Cebu workers called Class A will now receive P435, those under Class B will now P397, while Class C workers will now get P387 per day.

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