|ADB Report states that Philippine MSMEs and Startups greatest challenge is acquiring funding from banks and non-bank financing sources.|
A number of senators at the upper house of the 17th Congress of the Philippines have filed bills that would help local businesses, ranging from reforming the corporate income tax to helping small and medium businesses look for funding.
Here are 12 pending Senate bills that would help boost entrepreneurship:
1. Senate Bill 1204: Corporate Income Tax Reform/Senate 698: Reducing the Corporate Income Tax Rate
Both bills were filed to reform the Corporate Income Tax and amend the National Internal Revenue Code. Senator Nancy Binay’s bill (SB 1204) proposes the rates of income tax on domestic corporations be pegged at 28 percent by January 1, 2017, down from 30 percent in 2009. On the other hand, Senator Bam Aquino’s bill (SB 698) pushes for 25 percent by January 1, 2017 within the same period.
2. Senate Bill 1135: Informal Economy Transition Act of 2016
This bill filed by Senator Grace Poe is a Magna Carta for workers, enterprises and organizations in the informal sector. This bill would protect members of the informal sector—which provides almost 50 percent of the country’s total employment and 50 percent of the gross domestic product (GDP)—by giving them adequate social protection or assistance (like SSS membership).
3. Senate Bill 264: Micro, Small and Medium Enterprises
Filed by Senators Ralph Recto and Joel Villanueva, this bill would help micro, small and medium enterprises (MSMEs) by pushing the Development Bank of the Philippines to help finance these businesses.
4. Senate Bill 1019: Micro and Small Enterprises (Returns and Payment Percentage Taxes Exempt)
Though SMEs are exempt from VAT payment, they still need to pay a three percent percentage tax; a “business tax imposed on persons or entities who sell or lease goods, properties, or services in the course of trade or business.” This bill, filed by Senator Recto, would exempt SMEs from paying the percentage tax via an amendment of the National Internal Revenue Code.
5. Senate Bill 866: Fast Business Permit Act
Another bill filed by Senator Recto, this bill would promote the ease of doing business in the country by “mandating the automatic approval of business permit applications after thirty days of inaction and extending the validity period thereof” given that all necessary documents have been submitted. This, in turn, would reduce barriers to the growth and development of SMEs.
6. Senate Bill 974: Poverty Reduction through Social Entrepreneurship (PRESENT) Act
Filed by Senator Sonny Angara, this bill would institutionalize the “poverty reduction through social entrepreneurship” program (or PRESENT) and help create “social enterprises.” These “social enterprises” are social mission-driven organizations that would help the poor in setting up businesses.
7. Senate Bill 820: Expanded Coverage of Micro Enterprises
A fourth bill filed by Senator Recto would widen the coverage of enterprises as beneficiaries in the Magna Carta for MSMEs. Micro enterprises will now be defined as having assets of not more than Php 7.5 million, up from Php 3 million. Likewise, small enterprises will now be defined as having assets ranging from Php 7.5 million to Php 15 million.
8. Senate Bill 720: Small and Medium Enterprises Stock Exchange (SMEX) Act of 2016
Filed by Senator Cynthia Villar, this bill proposes the establishment of the Small and Medium Enterprises Stock Exchange (SMEX). Similar to the Philippine stock market exchange and serving as an equities market, the SMEX would help small businesses get capital to fund growth and expansion.
9. Senate Bill 210: Financial Literacy for Workers Act
This bill filed by Senator Villanueva would help minimum-wage workers who want to set up businesses by teaching them financial literacy and entrepreneurial skills.
10. Senate Bill 740: Enhancing the Welfare of Self-Employed Workers and Craftsmen
This bill filed by Senator Chiz Escudero would support self-employed workers and craftsmen by helping them gain social benefits (via SSS enrolment), occupational continuity (through agency programs) and decent living wage.
11. Senate Bill 169: Small Business Tax Reform Act
Filed by Senator Aquino, this bill would establish a simplified tax regime for small businesses via amendments to the National Internal Revenue Code. Similar to the corporate tax reform bill, this bill would help small businesses via measures like special assistance during tax payment, exemptions from tax audits, lowering their income tax rate and exemptions from VAT.
12. Senate Bill 354: Secured Transactions Act
A third bill filed by Senator Aquino would help SMEs through the creation of “a comprehensive legal framework to govern lending transactions that involve the use of personal property as collateral” and the creation of a national collateral registry.