May 17th, 2021
Salceda backs bill to give 40-up workers job opportunities; House tax chair cites potential productivity gains, benefits to economy
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) supports the passage of a proposal that would encourage businesses to hire “mature workers” or workers aged 40 and above by granting them tax cuts for doing so.
“The productivity gains to hiring workers with life experience will be immense. Under the current culture, most employers hire only fresh graduates. They are less enthusiastic about taking older applicants in. This is of course a problem, especially because many older applicants have families to support,” Salceda said.
Salceda adds that the culture “waste the valuable accumulation of skills that only older employees can deliver for a firm.”
“I see the productivity gains this will unlock, as an economist. And as people are living longer and our pension systems are taking a toll, opening opportunities for more mature employees, especially the elderly, to work will pad our pension systems,” Salceda added.
Improve tax provision to dispel veto
Salceda however warned principal authors that the Executive departments may push for a veto of the tax provision if the case for it is not “well-argued and well-established.”
“This is not a revenue measure, so if a provision can be vetoed, the whole bill will not be approved. That is why I hope to propose some revisions to the proposal so that we can push it through enactment,” Salceda said.
Salceda assigned Senior Vice Chair Estrellita Suansing, Vice Chair Sharon Garin, and Rep. Jericho Jonas Nograles to recommend to him an alternative formulation of the tax provision, so that it is less prone to abuse.
Under the current proposal, firms that hire “mature employees” will be “entitled to an additional deduction from their gross income, equivalent to fifteen percent (15%) of the total amount paid as salaries and wages.” This means that 115% of labor expenses for covered hires will be recognized by the Bureau of Internal Revenue (BIR) as a deduction from gross income for purposes of taxation.
Salceda warned that the provision is still vague in terms of hiring procedure, cap on credits, among others.
“Let’s add some safeguards. Sayang naman kung ma-veto if we can just amend the language,” Salceda said.