To expedite the country’s economic recovery from a two-year Covid-19 pandemic, senatorial candidate Sorsogon Governor Francis “Chiz” Escudero said the government should consider giving micro, small and medium enterprises (MSMEs) more time to pay their taxes.
Escudero, who is seeking a fresh six- year term at the Senate, said lawmakers should enact a law that would give direct financial assistance to MSMEs and allow a tax payment term of up to five years for them.
“Para makabangon tayo mula sa pandemiya, dapat magpasa ang susunod na Kongreso ng batas na tutulong sa MSMEs (For us to fully recover from the pandemic, the next Congress should pass a law that would help MSMEs),” Escudero said in a statement.
“Sa papaanong paraan? Halimbawa, bigyan ng direktang ayuda katulad ng ginawa ng ibang bansa para may pang-suweldo sila ng 6 hanggang 12 buwan. Kapag may suweldo ang empleyado, iikot ang ekonomiya sa kanilang lugar (How. For example, the government should provide the MSMEs financial aid, like what other countries are doing, so they can pay for their workers’ salaries for six to 12 months. If employers have something to pay their employees, the economy will again circulate),” he said.
“Bigyan sila ng palugit kaugnay sa pagbabayad ng buwis—tatlo hanggang limang taon, pwede nilang hulug-hulugan ang pagbabayad ng buwis (they should be given at least three to five years of extension for tax payment or they can pay their taxes in tranches),” the veteran legislator said.
The former senator noted MSMEs comprise 99.51% of the 957,620 business enterprises operating in the country in 2020, according to the Philippine Statistics Authority (PSA). Of these, 952,969 are MSMEs and 4,651 (0.49%) are large enterprises. Micro enterprises account for 88.77% of MSMEs.
“Lahat ng ihahalal natin sa darating na ika-9 ng Mayo, ang dapat tutukan ay isang bagay lamang—ang muling pagbangon at pag-ikot ng ating ekonomiya para yung mga negosyong nagsara, ‘yung mga trabahong nawala ay muling bumalik (We should elect leaders in the upcoming May 9 polls those who will focus on reviving the economy, so those who were forced to close shop and those who lost jobs can regain back what they lost),” Escudero, who once chaired the Senate Committee on Finance, said.
“Kung matulungan nating bumangon ang MSME, para nating napabalik na rin ang 99 porsyento ng ating ekonomiya, (If we are able to help MSMEs recover, we can revive 99 percent of our economy,” he added.
Escudero pointed out that Republic Act 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act has reduced the income tax of domestic MSMEs from 30 percent to 20 percent, provided that the MSMEs have a taxable income of not more than P5-million and total assets of not more than P100-million.
CREATE Act is touted as the largest fiscal stimulus for businesses in the country, providing private enterprises over P1-trillion worth of tax relief in the next 10 years.
The Department of Finance (DOF) had said MSMEs would be the biggest beneficiaries of the law because of “largest ever corporate income tax rate reduction in the country.”
Aside from tax reduction, Escudero said MSMEs need a tax payment extension to give them some fiscal space to recover and regain their income after the pandemic.
He noted that a tax extension would allow them to invest their money in business instead of using it to pay taxes lump-sum.