ESCUDERO’S BILLS TO CUT MSMEs TAX RATES, INCREASE ACCESS TO CREDIT

SENATE President Francis “Chiz” G. Escudero has  filed a string of bills aimed at strengthening the micro, small and medium enterprises (MSMEs) considered the backbone of the Philippine economy.

In his proposed measures, the Senate President wants to give MSMEs tax incentives and greater access to credit to help them flourish and expand their business operations.

The pro-MSME bills, which were among the 10 proposed measures the Senate chief wants to prioritize under the 20h Congress, recognize the significant contributions of the small businesses to the national economy as they provide 67 percent of the total employment across the country.

Under his proposals, the veteran legislator wants to exempt MSMEs from the income tax for three years and deduct from their taxable income an amount equivalent to 25 percent of their labor expenses.

Along these, he is proposing to slash the optional tax on gross sales or receipts to 5 percent from the current 8 percent.

Escudero is also pushing for the streamlining of the rates under the creditable withholding tax system to two – 1 percent for the purchase of goods and properties, and 2 percent for the purchase of services.

He is also calling for the reinstitution of the mandatory credit allocation for MSMEs by all lending institutions for a period of 10 years in order to provide small businesses with better access to financing.

“These will allow our MSMEs, particularly those that are struggling financially, to continue their operations, hire more people and even consider an expansion in the future,” the Senate leader said.