Senator Mark Villar has filed a measure seeking to exempt micro, small and medium enterprises (MSMEs) from the Minimum Corporate Income Tax (MCIT) saying it is imperative to provide them much-needed tax relief as they serve as the key driver of the Philippine economy.

Villar, in filing Senate Bill No. 2362, said MSMEs have provided significant contribution to the country yet many of them stil grapple with rising production costs, persistent inflation and other economic pressures.

These challenges, he said, are further aggravated when inflation climbed to 7.2 percent in April 2026 following the declaration of a national energy emergency, leaving many MSMEs struggling to sustain their operations.

“Our MSMEs are the backbone of the Philippine economy. They provide livelihood to millions of Filipinios, fuel local industries, and keep our communities economically active,” Villar said.

"By giving them meaningful tax relief, we allow them to reinvest in their businesses, create more jobs, and contribute even more to our country’s development,” he added.

Under the bill, Villar proposes exempting qualified MSMEs, as defined under the Magna Carta for MSMEs, from the MICT by amending the relevant provisions of the National Internal Revenue Code (NIRC). 

The bill also aims to reduce the tax burden on small businesses, enabling them to retain more capital for expansion, innovation, and job generation while improving thier competitiveness and resilience in a challenging economic environment.

Villar said he hopes passage of the measure into law would give MSMEs more power to expand their operations, improve productivity, and continue driving inclusive economic growth across the country.

“When our small businesses succeed, more Filipinos benefit through new jobs, stronger local economies and increased opportunities for families,” he said.

“This measure is about giving our entrepreneurs the support they need to grow and helping ensure that economic progress reaches every community,” he reiterated.