Deputy Speaker and Antique lone District Rep. Loren Legarda has sought the creation of a P30-billion “bridge fund” that would help the distressed restaurant industry continue its operations and stay afloat until the COVID-19 pandemic is over.
She filed House Bill No. 7610 to financially assist the restaurant owners and their thousands of employees during this time of pandemic crisis.
“It has been a challenge for restaurant owners and operators to sustain their businesses, sacrificing sales revenue, balancing their remaining cash flows to cover rental and other fees, taxes, while ensuring that they can still provide daily wages to their employees,” she said in a statement, noting that hundreds of restaurants in the country have ceased operations.
She expressed concern over the data released by the Department of Labor and Employment (DOLE), showing during the first nine days of August, around 16,134 workers were retrenched after 944 establishments downsized or ceased operations.
She noted that the since the imposition of enhanced community quarantine in March this year, 157,705 workers from 7,759 affected businesses lost their jobs, almost 48 percent of which are from Metro Manila, followed by Region IV-A (CALABARZON) at 21 percent, and Central Luzon at 11 percent.
At this rate, an average of 1,792 workers are being laid off daily, surpassing the highest number of employee dismissal recorded last June at 1,686, she said.
Under HB 7610, the proposed P30-billion “bridge fund” shall be sourced from programs and projects under the General Appropriations Act for Fiscal Years 2019 and 2020 which have been withheld, suspended, or otherwise not implemented due to the imposition of community quarantines.
The bill also provides tax incentives and rent-payment extension schemes of up to 24 months to distressed restaurants, under a set of guidelines to be provided by the Department of Trade and Industry (DTI).
“All local government fees and charges shall not be due and demandable within the year 2020 and that only 50 percent of what would have been assessed during the year will be chargeable to succeeding years in a restaurant-owner proposed payment scheme approved by the local government of the area where the establishment is located. Provided, that the local government may check the financial status of the restaurant in determining whether the proposal has merit,” the measure said.
Legarda said under her bill, commercial spaces where the restaurants are established, upon a showing that the tenant has endeavored to stay open and retain their staff, shall not be taxed for the year 2020 for rentals paid.
“For restaurants paying percentage taxes on their income, the 20-percent burden from senior citizen and PWD discounts borne by the restaurants shall be counted as deductions in the computation of the income taxes, and for those paying value added tax (VAT), such burden shall be counted as input VAT,” she said.
HB 7610 provides that for restaurants with mandated payments to the government or to government-owned and -controlled corporations (GOCCs) such as taxes, employee insurance and benefits, permit fees and the like, the owners may propose a reasonable payment plan that is spread out over 24 months.
The government entity or GOCC shall, upon a finding that denial will cause the closure of the restaurant within 2020 or 2021, grant the request or negotiate for reasonable terms of payment with the objective of letting the business recover their investments as well as overcome the economic hardship caused by the pandemic, it said.
The bill provides that no government agency, local government unit or GOCC shall apply any penalties for failure to pay any of the fees.
“The bill seeks to provide economic measures to the restaurant industry to ensure that they are able to provide jobs, prevent their closure through the creation of payment extensions and bridge funding, assist them in the transition to a better normal that would reduce food wastage, sustain biodiverse agriculture and prevent the spread of diseases in their business establishments,” Legarda said.