Trade and Industry Secretary Alfredo E. Pascual has batted for the granting of tax exemptions and other regulatory processes for newly registered micro small and medium enterprises (MSMEs) to ensure they focus on growing their business rather than be hampered by tax obligations and other compliance requirements.
During a panel discussion at the launch of “Kapatid Angat Lahat” program at the Manila Hotel on Friday, Aug. 26 at the MSME Summit organized by the Go Negosyo, the DTI chief said that he has already held initial discussions with the Bureau of Internal Revenue (BIR) to exempt the newly registered MSMEs from income tax payments and other taxes.
Pascual said that the BIR Commissioner was receptive to his proposal but they need to develop the mechanics on his proposal together with the local government units because most of the regulatory requirements come from the LGUs.
“My logic is this: For large investors we’re prepared to give them incentives for 10 years in tax holiday, how can you not give the same thing to our small businesses,” Pascual pointed out.
Under Pascual’s proposal, “New business you register and focus on your business.”
Pascual explained that the reason many businesses failed is because they are running their business alone and they have no one to send to the municipal hall to process their requirements and tax obligations.
As a result, he said, “Entrepreneurs cannot focus on their business because lots of their time are being taken by compliance requirements.”
Pascual further added that DTI will be launching a mobile app for MSMEs to give them a wider access to economic platform. Once enterprises are digitalized, they are provided with marketing support and it would be easier to gather data that would be needed for them to access financing.
Meantime, the United States, which is expected to bolster its economic relationship with the Philippines under Marcos administration, has expressed its support for MSMEs as it recognized its importance in the economic recovery from Covid-19 crisis.
At the same event, US Ambassador to the Philippines MaryKay Carlson assured Filipino business owners of the US' support to help them "recover and transform from the pandemic-induced slowdown."
She gave the assurance as she asserted that "running an MSME has never been an easy task," considering that "the Covid-19 pandemic certainly increased the level of difficulty for leaders of these enterprises."
"What is so impressive to me is that despite these challenges we have seen Filipino entrepreneurs and business owners persevere and prosper through ingenuity, drive and sheer grit," she said.
Carlson said the US knows that "targeted support for small businesses is a critical part of the pandemic response because it bolsters the hard work you are already putting into your enterprises."
In fact, the US, through the United States Agency for International Development (USAID), already extended assistance to Filipino MSMEs by offering digital economy as well as microgrants.
She called for Filipino MSMEs to "be at the forefront of our response to the collective impacts of the pandemic, the climate crisis" as well as other because "MSMEs are the backbone of a Philippine economy."
"As your enduring friend, partner and ally, the United States is honored to collaborate with the government and the people of the Philippines to support micro, small, medium businesses so they can continue to grow and propel the country's economic transformation," she ended.