How the TRAIN Law Affects Call Center Services in the Philippines

How will the TRAIN LAW Affect the Call Center Services in the Philippines?

1. Increase in Salary
2. Better Intrinsic Benefits
3. Improved Performance and Productivity
4. Healthier Lifestyles

The Philippines is known for its BPO industry. Call center services in the Philippines have continually improved and produced outstanding results that benefit the national economy. Over the years, the industry has been one of the biggest contributors to the labor and business sectors of the country.

The Duterte administration has begun its comprehensive tax reform program by introducing the Tax Reform for Acceleration and Inclusion (TRAIN). This aims to correct some of the deficiencies that the current tax system has, making it simpler and more efficient.

The simplest way to explain the TRAIN law is that it removes the personal income tax from compensation earners and self-employed individuals who have an annual taxable income of Php250,000 and below. To compensate, the tax for other products, such as oil, cigarettes, and sweetened beverages are increased. 

As important as the BPO industry is in the Philippines, it is important to understand how these changes will affect the many call center services in the Philippines.

Increase in Salaries

The most obvious result of this law being in effect is the increase in the salaries of call center employees. This adjustment to the tax system can remove the unfair burden that falls upon the working class.

The TRAIN law was implemented with the benefit of the working sector and the underprivileged people in mind. With that being said, an easy way to achieve it is by removing the personal income tax from people who earn Php20,000 and below.

Even with the other provisions that increase the tax on fuel, tobacco, and sweetened beverages, it is estimated that the typical call center agent will still be able to bring home an extra Php 1,700 to around Php 4,000.

Though it looks small at first, this increase can add up and impact the lives of workers greatly.

Better Intrinsic Benefits

Some BPOs have also expressed how beneficial the TRAIN Law is for all of their workers. The restructuring of the personal tax system of the past will not only increase their wages but also adjust the benefits that they receive.

The funds generated from the new tax system will help the government supply better services for everyone in the country. One of the most notable would be healthcare. In recent times, healthcare has become a major priority of many industries, particularly BPOs. The working sectors are said to be the most vulnerable to physical, and mental health issues, which is something that can be solved if better healthcare services are provided.

Improved Performance and Productivity

Another area where the funds collected from the TRAIN law will be put in is the education and humanistic development of the Filipino people. For the working sector, there would be an increase in the number and quality of training and workshops. Better personnel development can lead to better performances for most companies, especially call center services.

As an investment in the future of the country, improving the public education system will have a slow, yet lasting effect on the country. This will lead to the nurturing of more professionals in the future that will improve not just the BPO industry, but the whole status of the country in general.

Healthier Lifestyles

Because of the re-balancing of taxes on products, the TRAIN law indirectly helps the majority of the population consider healthier lifestyles. The increased taxes on cigarettes can reduce, and probably stop people from smoking like they used to.

It is because of this possibility that the DOH commends the passage of the TRAIN Law. Overall, the TRAIN law has indirectly made it a must for the Filipino people to consider, and most probably adopt a healthier lifestyle.

Key Takeaway

As part of the comprehensive tax reform program of President Duterte, the TRAIN law was created to improve the tax systems of the country with the underprivileged in mind. 

Its provisions will affect every person, mostly those who are part of the working sector. In the case of call center services in the Philippines, it will also bring about a significant shift in the lifestyles of employers and employees.