Such a law if passed and enacted will enable startups to gain valuable time in setting up their enterprises and carving a niche in their target markets
"The intervention provides the opportunity for these start-ups to get organized, establish their business operations and market base," said Aquino, chairman of the Committee on Trade, Commerce and Entrepreneurship.
A 2 year tax exemption for new businesses that are not subsidiaries of an existing companies will allow them to re-invest revenues into expanding and tweaking their business models.
"They should have at least five percent share with no nominal stockholders and a in case of a corporation, a venture capitalist should only have up to fifteen percent of total outstanding shares," the senator disclosed.
Startups and MSMEs account for 96% of the Philippine economy and the model for tech startups have been proven to stimulate the economies of the US, Japan and South Korea. The existence of tech startups will not nly spur employment but will also supplement larger industries into subcontracting their manufacturing and processes to these smaller enterprises thus launching a top to bottom and bottom to top manufacturing industry.
Innovation will no longer be the monopoly of big corporations and it will harness the intellectual and creative potentials of those who do not belong to the big corporations.
Senator Aquiino stated that "Start-ups have the potential to spur and spread such innovation. As these enterprises have likewise the appetite to take on more risks, they would fuel creativity and challenge existing ways of doing business,".
Filipinos are known to be creative evein with limited resources and that such talent and potential remains untapped. Such potential would need at least 2 years to grow and be financially stable and self-sufficient. Such a law will greatly help the nascent ideas to create for a more indigenous tech industry to grow.
Source: Readings from http://interaksyon.com/article/88150/bam-seeks-2-year-tax-exemption-for-start-ups