As the year begins, we need vital economic reforms that can boost our resilience and competitiveness. Lower taxes, infrastructure improvements, and continuous efforts to modernize agribusiness and encourage investments in minerals and manufacturing will help drive recovery and growth, especially in the rural areas in 2021.
We hope to see the passage of the CREATE bill, which mandates a 5-10 reduction of corporate income taxes based on the Senate version of the proposed measure. This tax cut that can help many businesses. From the current 30 percent, taxes can go down to as low as 20 percent for micro, small, and medium enterprises (MSMEs) with net taxable income of P5 million and below, and with total assets of not more than P100 million excluding land.Others, including foreign firms will see their CIT rates go down to 25 percent. MSMEs are about 90% of all businesses. Imagine many businesses in the rural areas benefitting from this.
As I have written before, this cut puts our tax rates at the same level as our counterparts in ASEAN. For many businesses like us, it makes the prospect of expansion brighter, and the possibility of attracting partners and investors stronger. This makes it a vital reform to help make the business sector more resilient and competitive well into the future amid disruptions such as those that we have seen in 2020. We hope to see these reforms passed soon as tax season is coming up.
Digital economy growth
Many of you are aware of just how important the digital economy has become for many. In a previous column, I highlighted the IBM Institute for Business Value Survey of top executives, with 51% of them saying they will be pursuing digital transformation in their businesses https://mb.com.ph/2020/12/07/encouraging-numbers-continued-vigilance/. The need is now greater, and creates opportunity for many local information technology companies involved in web design, app and content development. Well explore more on this next week with industry leaders.
The mining industry can create rural jobs
In a previous column I wrote about the mining and manufacturing sector and how boosting these can increase our recovery by generating jobs and creating countryside opportunities.(https://mb.com.ph/2020/11/02/possibilities-hope-and-vigilance/)
For one, many mining investments utilize land that otherwise would not be suitable for growing crops or will simply be difficult to inhabit or conmercialize. Imagine many areas where locals leave to find proverbial greener pastures. Many of them are mineralized. Mineral processing and the downstream manufacturing industries can expand job generation. Minerals and other resources are discussed in Article 12 of the Constitution. With new technologies in place, to manage environmental impact, and the opportunity, there is no reason why we cannot utilize these resources.
A message to sons and daughters
In recent months and especially with the Christmas season, the ability to interact with many intimately has actually increased online through social media messaging facilities.
Please, please cherish every cellphone call, online chat, or message. Its a blessing for you to interact with them in their old age. There is much wisdom worth hearing – stories of past struggles to learn from as we all navigate the new normal.
Its also a blessing for them to hear from you, to know that you are OK. You may be pleasantly surprised, as i was with my late father at 77 years old, that their time at home enabled them to learn the subtle art of managing online meetings, or even being an administrator of an online group!
Continue to stay safe and implement health protocols everyone!