The proposed dismantling of the business incentives infrastructure is revenue-neutral and should not result to any massive job dislocation, the Department of Finance (DoF) said on Wednesday.

Finance Undersecretary Karl Kendrick Chua gave this assurance at a news briefing in Malacañang where he said the proposed Tax Reform for Attracting Better and Higher Quality Opportunities (TRABAHO) translates to even more job opportunities for Filipinos.

“In our view, job losses, should there be any, should only be minimal,” Chua said.

This relates to proposed legislation where a number of business enterprises enjoying so-called tax perks at the moment would eventually lose them as provisions under TRABAHO kick in.

But according to Chua, only some 3,000 business enterprises enjoy the privilege of paying minimal or zero tax and that the likely impact of job losses, should there be any, should be more than made up for by thousands of small-and-medium enterprises (SME) who would begin to pay reduced income tax of only 20 percent instead of 30 percent at present.

That reduction in corporate income tax was seen to fuel SME capital expansion programs that redound to fresh job opportunities and income not just for individuals but a new revenue stream for the government as well, Chua explained.

“There are only 3,000 firms receiving incentives and 900,000 micro-small and medium enterprises with much, much, much more jobs they can create or expand. This is the bill or reform that will massively create new jobs,” he said.

The proposed legislation, previously known as Package 2 of the original TRAIN Act, is now billed as the TRABAHO initiative under President Duterte, one that some in the private sector fear would act as a disincentive to the various businesses which located in the Philippines on the basis of tax perks and other privileges extended virtually without limit.

Finance Secretary Carlos Dominguez III has since said such perks have to be recast and made time bound as well as sector-specific.

Under these conditions, Chua claimed TRABAHO should prove revenue-neutral and should cause headline inflation to pick up speed.

“The DoF’s version is revenue neutral, so inflation (should not spike). The House’s initial version (redounds to) revenue loss and therefore zero collection for us. Should inflation act up, it could be for other reasons,” Chua explained.

He also said the bill has set aside P500 million as structural adjustment fund to assist those who are actually laid off and P500 million more to help retool or retrain the hapless workers.

This safety net mechanism will be replenished every year for five years, Chua said.